Has China joined the global currency wars?

Livewire
Since mid 2014 the Yuan had appreciated 13.5% against a trade –weighted basket of 61 currencies. This is hurting China’s international competiveness and added pressure on policy makers to cushion the slowdown, as a free-floating currency normally would. QIC highlight that “unofficial sources have suggested some within the government are pushing for a devaluation of 10%.” In their recent review QIC also argue that while cyclical weakness may have played a role in the recent PBoC Yuan devaluation, the central bank also has a “desire to internationalise the RMB and move towards a more market-based exchange rate system. Allowing the exchange rate to be more reflective of market forces increases the likelihood that the RMB will be included within the IMF’s currency basket; the special drawing rights (SDR). “ To read more from QIC on the impacts of this devaluation click the (VIEW LINK). Below QIC also provide a recent market movement summary.
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Livewire News brings you a wide range of financial insights with a focus on Global Macro, Fixed Income, Currencies and Commodities.
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