Kyle Bass: China’s Currency Would Collapse 30% to 40% If They Stopped Supporting It
- Kyle Bass: China’s Currency Would Collapse 30% to 40% If They Stopped Supporting It
by Thomas Franck, https://www.cnbc.com/world/
* “If they were to ever free float their currency, I think it would drop 30% or 40%,” Bass said of China and its currency, the yuan.
* Bass’s comments came after the Chinese yuan changed hands above 7 against the dollar for the first time since 2008.
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Hedge fund manager and Hayman Capital Management founder Kyle Bass said on Monday that without state support, China’s currency would plunge. “What’s happening in China is they have to have dollars to sell to buy their own currency to hold it up. If they were to ever free float their currency, I think it would drop 30% or 40%,” Bass told CNBC’s “Closing Bell.”
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“And the reason is they claim to be 15% of global GDP in dollar terms, but less than 1% of global transactions settled in their own currency,” Bass added. “And so, they prop their currency up…everyone calling them a currency manipulator – they are trying to hold this whole thing together.”
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Bass’s comments came after the Chinese yuan crossed a closely watched barrier against the U.S. dollar. The onshore Chinese yuan changed hands above 7 against the dollar, the currency’s weakest levels against the greenback since 2008.
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