Prakash Sakpal, Economist at ING, suggests that their baseline is that the PBOC continues to manage the fixing “with reference to a basket of currencies” and their yearend USDCNY forecast is 6.65. Key Quotes “Premier Li said in his meeting with IMF MD Christine Lagarde that China would not resort to depreciating the yuan to boost exports and any “currency war” would be detrimental to the smooth recovery of the world economy. He also said they would push forward reform of the yuan’s exchange rate mechanism and ensure the yuan’s exchange rate floats within a reasonable band and is kept largely stable at an appropriate and balanced level. We expect the impact of the spending shock to persist and export growth in 2016 to be weaker than 2015’s -2.5%. We consider PBOC RMB policy risk the main threat to the current risk-on rally but our baseline is that the PBOC continues to manage the fixing “with reference to a basket of currencies.” Based on ING’s USD/Majors forecast our yearend USDCNY forecast is 6.65 (latest 6.48, Bloomberg median 6.77, forward 6.66).” For more information, read our latest forex news.