The $4 Trillion Problem With China's Currency Being Market Valued

Several of the articles discussing the decision of China's central bank to lower the value of the yuan have referred to the assessment of the I.M.F. that the Chinese currency now reflects its market value. Many have pointed out that China's central bank has stopped buying large amounts of foreign exchange to keep the yuan from rising, implying that the current value now reflects the market rate.

The problem with this story is that China's central bank is still sitting on more than $4 trillion...