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They're already doing that: http://www.wsj.com/articles/china-moves-to-devalue-the-yuan-1439258401 http://www.wsj.com/articles/china-moves-to-devalue-the-yuan-.
by jpatokal 11y ago
They're already doing that: http://www.wsj.com/articles/china-moves-to-devalue-the-yuan-1439258401 http://www.wsj.com/articles/china-moves-to-devalue-the-yuan-...
Despite the misleading subtitle, this is a change to the way the yuan is managed and will allow continual (slow) devaluation.
- jamesblonde 11y agoAgreed, this is just the first act.
- nodata 11y agoWhat's the second act?
- jamesblonde 11y agoThe first devaluation is just a political move. Just to test the waters - will the Americans go crazy about them devaluing. In the second act, they will say - hey, this 1.5% didn't work. Look our industrial production is still falling. We have to adjust to market forces and devalue more. Then comes the 20% or so devaluation. But look, the Yuan has appreciated around 8% the last 5 years, so it will only be a relatively small devaluation. That will be the argument.
- dpc_pw 11y agoAnd the strengthening dollar will force more QE or/and negative interests rate and basically a currency war...
- deleted 11y ago[deleted]