Recent USD/CNY movements suggest some (trend) depreciation in CNY NEER

China's central bank PBoC wants to guide the opinion of public in order to focus on the effective exchange rate of CNY versus a basket of currencies than the bilateral USD/CNY rate to assess the currency's likely direction.

"We think the USD/CNY exchange rate determination will certainly reflect an increasing reference to the NEER currency basket even if the PBoC has not explicitly committed to this", says Barclays in a research note.

PBoc has reiterated that ""it will maintain the CNY exchange rate basically stable at an appropriate and equilibrium level against a currency basket" on 14 December.

Nonetheless, the recent USD/CNY movements seem to indicate some depreciation in CNY NEER, regarding the previous solid NEER appreciation since mid-2014, continuous weakness in growth, and deflation risks.