Thursday, August 10, 2006

China to Significantly Revalue?

According to Financial Times, China have now started to hint that it might revalue the yuan ( aka the renminbi) by saying such a move could be part of the solution to China's rising trade- and current account surplus and excessive build-up of foreign exchange reserves. In the past, Chinese officials have been saying that it should play essentially no part, so this could signal a policy change by either a on-off revaluation and/or by accelerating the pace of gradual appreciation.

Let's hope this interpretation is right, as it would be in the best interest of both China and the rest of the world to see a significant increase in the foreign exchange value of the yuan.

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