Remember 'The Santa Claus Rally' that Bob Pisani said "we should expect" - well The Dow is now down over 1200 points from the highs just before the end of the year and extending those losses as Reuters reports, PBOC advisors are said to call for steeper yuan depreciation, pressuring the government to depreciate by 10-15%.
Dow collapse...
As all major US equity indices are in free-fall since the start of December...
As reuters reports, China's move to devalue its currency reflects a growing clamor within government circles for a weaker yuan to help struggling exporters, ensuring the central bank remains under pressure to drag it down further in the months ahead, sources said.
The yuan has fallen almost 4 percent in two days since the central bank announced the devaluation on Tuesday, but sources involved in the policy-making process said powerful voices inside the government were pushing for it to go still lower.
Their comments, which offer a rare insight into the argument going on behind the scenes in Beijing, suggest there is pressure for an overall devaluation of almost 10 percent.
"There have been internal calls for the exchange rate to be more flexible, or depreciated appropriately, to help stabilize external demand and growth," said a senior economist at a government think-tank that advises policy-makers in Beijing.
"I think yuan deprecation within 10 percent will be manageable. There should be enough depreciation, otherwise it won't be able to stimulate exports."
The Commerce Ministry, which on Wednesday publicly welcomed the devaluation as an export stimulus, had led the push for Beijing to abandon its previous strong-yuan policy.
Offshore Yuan is tumbling on the news despite overnight Yuantervention...