Föhrenbergkreis Finanzwirtschaft

Unkonventionelle Lösungen für eine zukunftsfähige Gesellschaft

Posts Tagged ‘appreciaition’

Will Dollar Strength Trigger Intervention in 2017?

Posted by hkarner - 31. Dezember 2016

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One Year Later, How Much has China’s Yuan Appreciated?

Posted by hkarner - 20. Juni 2011

Author: Ed Dolan · June 13th, 2011 · RGE Economonitor

A year ago this week China announced a major change in its exchange rate policy. After holding the yuan-dollar exchange rate fixed for almost two years during the global crisis, the country’s central bank, the People’s Bank of China (PBoC) announced that the yuan would once again be allowed to float, albeit in a highly controlled way. The yuan began appreciating against the dollar immediately, touching off intense speculation about how far it would be allowed to move. A year later, what has happened?

The yuan-dollar exchange rate is a highly sensitive issue in both countries. Many politicians and pundits in the United States blame China for high U.S. unemployment, a slow recovery from the Great Recession, and a persistent trade deficit. The economics profession is a little more reserved. Many economists point out that a stronger yuan would not necessarily work magic for the U.S. economy. An appreciation of the yuan alone could simply lead to re-sourcing of imports, buying them from Vietnam, Bangladesh, India or elsewhere, in which case there would be no automatic closing of the U.S. trade gap. Still, econometric studies by and large have supported the notion that the yuan had been undervalued relative to the dollar, probably by 20 to 40 percent, at the time China’s policy shift was announced. Den Rest des Beitrags lesen »

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