On October 8, the central bank released a statement on its stance regarding the exchange rate—basically putting everything out there upfront. The exchange rate will be left to the market, with no target price set. They’ll only step in if there’s extreme volatility that threatens financial stability. As for devaluing the currency to boost exports, the statement directly denies this approach. Back in 2005, during the exchange rate reform, the yuan was around 8.27 to the dollar. Now it’s about 6.7, marking a cumulative appreciation of 23%. Some people are citing the IMF’s External Sector Report, claiming the yuan is undervalued, but the central bank says that’s a misinterpretation of the findings. Next week is the IMF annual meeting, and this statement was clearly timed to drop before the discussions heat up.