China set to let Russian currency fall faster
BEIJING (AP) — China is easing government exchange rate controls to allow the Russian ruble to fall faster against the Chinese yuan to help shield Beijing from economic sanctions on Moscow.
The margin by which the ruble is allowed to fluctuate against the yuan in daily state-controlled exchanges will be doubled to 10% above or below the day’s opening price from Friday, the report said. China Foreign Exchange Trade System.
The ruble has lost about 40% of its value since Western governments cut off some Russian banks from the SWIFT international payment system in retaliation for President Vladimir Putin’s Feb. 24 attack on Ukraine. The Russian central bank has been prevented from using its foreign currency reserves to defend the exchange rate.
China avoided joining other governments in criticizing Putin’s attack and criticized Western sanctions. Chinese companies are showing no sign of joining their Western counterparts in pulling out of Russia, but economists say they will likely try to take advantage of pressure on Moscow to try to strike better deals.
Keeping the exchange rate constant would force China’s central bank to subsidize Russian buyers of Chinese goods by giving them more yuan for their rubles than market forces were worth in Moscow’s currency.
The latest change would allow Chinese exchange rates to follow the ruble’s sharp daily swings.