When China eventually abandons the peg, the country will have to manage its exit strategy carefully. If the central bank allows a gradual appreciation of its currency, which would be the best strategy for its exporters, there could be an inflow of funds from speculators betting on further appreciation. However, a one-off revaluation could deal a severe blow to the country’s manufacturing sector.
China wants to distance itself from the dollar, but not too fast as to attract attention of why it is doing so. China talks obligingly when it cannot oblige.
Talk of China giving up on dollar is nonsense: banker
Any speculation that China might stop supporting the dollar in the next few years is absolute nonsense, a top state banker said.
To ensure not too many feathers are ruffled, a top state banker indicates continued support when support is obviously dwindling.
China cautions against expecting fast yuan rise
Any rise in the yuan's exchange rate will be gradual, China's trade chief said on Monday in comments that underline the competing interests at the heart of Chinese policy-making.
Yet, despite the continued support, the appreciate of the Yuan will not be too fast. Bottom line, the Chinese are in control and will reduce their dollar exposure while orchestrating their official policy stance like a master conductor through the media outlets.
0 comments:
Post a Comment