{"id":312,"date":"2016-10-23T18:08:21","date_gmt":"2016-10-23T07:08:21","guid":{"rendered":"http:\/\/www.bleufair.com\/?p=312"},"modified":"2022-04-10T09:15:57","modified_gmt":"2022-04-09T22:15:57","slug":"relation-between-china-yuan-and-usd","status":"publish","type":"post","link":"https:\/\/www.bleufair.com\/?p=312","title":{"rendered":"Relation between China Yuan and USD"},"content":{"rendered":"

China\u2019s Currency Policy<\/strong><\/p>\n

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A cornerstone of China\u2019s economic policy is managing the yuan exchange rate<\/a> to benefit its exports. China does not have a floating exchange rate <\/a>that is determined by market forces, as is the case with most advanced economies<\/a>. Instead it pegs its currency, the yuan (or renminbi<\/a>), to the U.S. dollar. The yuan was pegged to the greenback<\/a> at 8.28 to the dollar for more than a decade starting in 1994. It was only in July 2005, because of pressure from China\u2019s major trading partners, that the yuan was permitted to appreciate by 2.1% against the dollar, and was also moved to a \u201cmanaged float\u201d system against a basket<\/a> of major currencies that included the U.S. dollar. Over the next three years, the yuan was allowed to appreciate by about 21% to a level of 6.83 to the dollar. In July 2008, China halted the yuan\u2019s appreciation as worldwide demand for Chinese products slumped due to the global financial crisis<\/a> . In June 2010, China resumed its policy of gradually moving the yuan up, and by December 2013, the currency had cumulatively appreciated by about 12% to 6.11.<\/p>\n

The true value of the yuan is difficult to ascertain, and although various studies over the years suggest a wide range of undervaluation – from as low as 3% to as high as 50% – the general agreement is that the currency is substantially undervalued<\/a>. By keeping the yuan at artificially low levels, China makes its exports more competitive in the global marketplace. China achieves this by pegging the yuan<\/a> to the U.S. dollar at a daily reference rate<\/a> set by the People\u2019s Bank of China (PBOC)<\/a> and allowing the currency to fluctuate within a fixed band (set at 1% as of January 2014) on either side of the reference rate. Because the yuan would appreciate significantly against the greenback if it were allowed to float freely, China caps its rise by buying dollars and selling yuan. This relentless dollar accumulation led to China\u2019s foreign exchange reserves<\/a> growing to a record $3.82 trillion by the fourth quarter of 2013.<\/p>\n

Read more: Why China’s Currency Tangos With The USD | Investopedia<\/a> http:\/\/www.investopedia.com\/articles\/forex\/09\/chinas-peg-to-the-dollar.asp#ixzz4NtwpLO4G<\/a>
\nFollow us: Investopedia on Facebook<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

China\u2019s Currency Policy A cornerstone of China\u2019s economic policy is managing the yuan exchange rate to benefit its exports. China does not have a floating exchange rate that is determined by market forces, as is the case with most advanced economies. Instead it pegs its currency, the yuan (or renminbi), to the U.S. dollar. The […]<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":["post-312","post","type-post","status-publish","format-standard","hentry","category-finance"],"_links":{"self":[{"href":"https:\/\/www.bleufair.com\/index.php?rest_route=\/wp\/v2\/posts\/312","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bleufair.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bleufair.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bleufair.com\/index.php?rest_route=\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bleufair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=312"}],"version-history":[{"count":2,"href":"https:\/\/www.bleufair.com\/index.php?rest_route=\/wp\/v2\/posts\/312\/revisions"}],"predecessor-version":[{"id":1871,"href":"https:\/\/www.bleufair.com\/index.php?rest_route=\/wp\/v2\/posts\/312\/revisions\/1871"}],"wp:attachment":[{"href":"https:\/\/www.bleufair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=312"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bleufair.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=312"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bleufair.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=312"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}