US online title the Daily Beast claims that the Beijing regime had ‘walked back’ on its pledge to let the Yuan float.This truly is news through a filter of cultural bias and lousy research.

Events show that it was Western interpretation gone wrong, followed by a Beijing decision to clarify. (See Slog Saturday). The Beast-bite turned out to be wrong in two ways at once, as Reuters recorded this morning that the yuan had jumped to

a 21-month high against the dollar on Monday, with the Chinese
central bank stepping aside and tolerating broad gains after
ditching the currency's two-year peg to the dollar over the
weekend.

However, the FT said something rather different at 6.45 am today:

‘China left its exchange rate with the US dollar unchanged on Monday despite pledging at the weekend to introduce a more “flexible” policy in what had appeared to be decision to break the two-year peg to the dollar….’

SNAFU, as US airmen are fond of remarking. The Slog asks simply ‘why not read The Slog and get the truth?’

The People’s Bank of China issued a press release Saturday which stated quite clearly:

‘Starting from July 21, 2005, China has moved into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies.’

The key words there are ‘managed’ and ‘floating’. Beijing will do what it always does with market forces: watch their movements and, when they deem the markets to be silly, step in to manage things. Those wedded to the market always deciding (whether right or wrong) should pay more attention to the source material – before going off half-cocked.

The Slog established early this morning that the experiment started for the July 21st Asian markets.

The current Yuan/Dollar exchange rate is 1 USD = 6.81049 CNY. This is higher than it was last Friday. Asian markets responded well on the whole.