China’s Renminbi Announcement: A Big Headfake

The Chinese central bank made a vague announcement about its currency policy on its website today, which the officialdom, on cue, treated as a major move (to wit: “China vows increased currency flexibility” at the Financial Times, “Chinese say they intend to free up their currency,” Washington Post).)

As we describe below, this “announcement” is basically a non-statement to silence Westerners calling for a revaluation in the runup to the Toronto G-20 meeting later this month.