Anyone curious about whether China is intentionally allowing the RMB
to depreciate, need look no further than the Central Bank's latest forex
reserve figures, which registered a decline for the first time in
nearly six years. At the same time, Chinese trade figures indicate that
exports fell for the first time in seven years, which limits the
government's ability to build up new reserves. As a result of the credit
crisis, it's conceivable that the Central Bank will continue to spend
down its reserves in order to provide a boost to its faltering economy.
US President-elect Obama will have to deal with such forces if he wishes
to successfully take on China's currency policy. Otherwise, the
RMB currency could appreciate in 2009, bucking its trend over the last
few years.
Read More: China's forex reserves fall
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment