"The PBoC monitors the exchange rate and interest rate differential between the domestic and offshore renminbi and has successfully narrowed this through occasional intervention. Now this role has been institutionalised with regular interventions by the PBoC according to a report by the International Monetary Institute."

>This engineered solution is necessary for the time being, but it constitutes a drag on the international use of the renminbi. In addition, it is highly unlikely that Chinese authorities will take a benign approach, like the US, to a major offshore market of their currency. Their main concerns, like Japan in the 1980s, are that powerful global financial markets could undermine domestic monetary and financial stability.