currency exchange Chinese Currency Exchange.doc

currency exchange Chinese Currency Exchange 导读：就爱阅读网友为您分享以下“Chinese Currency Exchange”资讯，希望对您有所帮助，感谢您对92的支持! /news/finance-and-economicswhy-chinas-central-bank-weakening-its-currency-one-way-no-more Why China?s central bank is weakening its currency China?s Currency One way no more Mar 1st 2014 | HONG KONG | CHINA’S currency has long been a source of controversy, especially among American politicians outraged by its cheapness. But it is rarely a source of uncertainty. Critics have argued fiercely about what it should be worth. But as to what it would be worth, China’s authorities have left little room for disagreement. For much of its history it has been pegged tightly to the dollar. More recently it has floated within a narrow band (now 1% either side of a benchmark fixed each morning by the central bank). Most people have assumed it would float upwards. In recent days, however, China’s authorities have tested that assumption. At a two-day meeting ending on February 18th, the central bank decided to weaken the yuan, according to the Wall Street Journal. It has lowered its benchmark by a smidgen at a time for several days. The currency has also fallen from the strong side of its band to the weak side. In the space of a few days, it lost about 1% of its value. On February 26th China’s foreign-exchange regulator said that China’s ongoing exchange-rate reforms meant that “two-way fluctuations… will become the norm”. For the past year, a different norm has applied: the fluctuations have been mostly one way. China enjoys a sizeable current-account surplus and it still attracts more foreign-direct investment than it provides. Other kinds of capital flows are more volatile. But in the last quarter of 2013, a net $22 billion of “hot money” flowed inwards. Much of this qualifies as a “carry trade”: speculators have borrowed cheaply in dollars, then lent in yuan, eluding China’s capital controls in the hope of benefiting both from higher Chinese intere