New China leaders to free up yuan says Commerzbank now that we know that Xi Jinping and Li Keqiang will take over from President Hu Jintao and Premier Wen Jiabao respectively at the National People's Congress next March. "The new leadership is not characterized by strong stances on future reform," Commerzbank analyst Ashley Davies says. "Still we think it is likely that the defining reform of the new leadership will be capital account liberalization, as China seeks to rebalance growth away from the potentially unstable investment driven development process to date," he says, adding that a floating exchange rate would also likely be accompanied by higher interest rates. So watch this space. USD/CNY is at 6.2363.
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