If we focus on the real economy there are a number of factors that place we all know China ‘s economy in a situation of vulnerability.
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Would the depreciation of the yuan any effect on the value of the euro against the dollar? Thank you
Faced with such comments, as well studied as prepared. Presumably they must have and will have a thousand and one meeting to stop this debacle … to end this serious situation, as we can see is not an easy task. The CSRC although he has a rather complicated task will have been trying to end, as far as it goes , all the more appropriate resources to stop these devastating times for his country.
I also agree that give us the key developments yuan.
It is manifest and known that for the purpose, the Chinese currency is changed
artificially low long before the beginning of the crisis, and that part
of the responsibility for the current Chinese crisis, derived from the appreciation of the Yuan,
really is the Chinese government willing to devalue its currency? ..
it is a question that would go far, I promise to write a post about it to try to clarify these interrelationships. The answer is that it will affect. For example, look what happened in August in China, depreciation of the yuan, bestial stock market crash. That was the root cause of not raising rates by the Federal Reserve in September and to do so in December, you yourself can see the impact. Appreciation of the euro against the doubts raised about the American economy no rate hike.
In the current situation, China is undergoing a worrying capital outflows and to an environment like today, investors are going to dollar (shelter) bringing increased demand for dollars. That’s basically the main idea.
On the other hand, trade flows are important but on balance outweigh the flow of capital and the idea of the preceding paragraph shall be imposed.
I hope I could help.
Thank you for your question.
The situation is that China bases its economic growth in recent decades precisely in its export model. Given the huge trade surpluses and to continue its model must intervene the foreign exchange market to keep the competitiveness due to the appreciation of its currency. Responsibility if you want to be we can put all countries with current account deficits that China has to finance. Let ‘s say the Chinese currency Cotize discount is a cause of the above. The Chinese government is unwilling to devalue, although I think it will continue to adjust downward precisely because of the change in the production model. Similarly, the communist touch to intervene will not go so easy and continue to see more performances of its central bank certainly has plenty arsenal.
I hope I’ve been helpful.
Thank you very much.
I’m already calmer for the rest of the world if China making when the China Bank (not the government) intervenes and keeps its currency, is seeking balance on a previous imbalance causing all scales of global payments deficit.
Global stock markets plunge because if China can keep up its currency because it is others who used their currency to become more competitive.
If we let the currency market without interfering with reservations, only devalue the yuan.
Some say here that China is backward and intervenes to be more competitive when is the reverse that devaluation is the solution and not the problem.
China is an emerging that devalue out of nothing, but does the opposite function of supporting the balance of payments problems around the world.