Should China revalue the yuan against the dollar? If so‚ what impact may this have on (1) US balance of payments‚ (2) Chinese balance of payments‚ (3) relative competitiveness of Mexico and Thailand‚ (4) firms such as Wal-Mart‚ and (5) US and Chinese retail consumers? China‚ the largest growing market in the world‚ currently has a policy regarding monetary regulation that allows the Yuan to “float”. This has seen the Yuan appreciate by approximately 24% over the past few years. Today‚ the exchange
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What is devaluation of a currency? It refers to decline in value of a currency with respect to other currencies‚ which is most of the times brought by central bank. It should not be confused with term depreciation of currency which is a decline in currency value due to market forces without interference of government. When does this happen and how? This happens mostly in developing countries which don’t allow currency prices to be determined by market forces. What happens is that they want to
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Revaluation of Yuan | | | 2/16/2011 | A mini case study | | Prepared by Angela AgostinacchioAmerican University of DubaiSpring : International Finance Management2011 | | | Revaluation of Yuan synopsis On 21st July 2005‚ Sun rose from the east with shocking news. China government and People’s Bank of China officially changed the value of their currency and thus removed its peg with US dollar. Prior to the revaluation‚ $1 U.S. dollar bought 8.27
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Argentina Devaluation Raises Fears of a Crisis The issue raised by the devaluation of the Argentinian currency has brought uncertainty not only to the country but also to the rest of the world. Argentina suffered an economic crisis back in the late 1900’s – early 2000’s and it might expect another crisis in the near future. An exchange rate control was applied in this country many years ago which basically consists on not allowing citizens to exchange their Pesos for Dollars in the free market
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rate of inflation [of around 15%]‚ which was believed to be largely attributed to excessive liquidity in the economy owing to booming private investment in the real estate sector of the country. The Government wanted The Central Bank to advise it on ‘what was to be done’- both from the perspective of the Central Bank and The Government. The Bank itself was undergoing the pangs of transition. Almost everyone in the director board of The Bank‚ except Mr. Jones the Chairman of the Recruitment Board of
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Impact of the Chinese Yuan Revaluation Xiaohe Zhang School of Economics‚ Politics and Tourism Faculty of Business and Law The University of Newcastle. Callaghan‚ NSW 2308‚ Australia Telephone: 612-49215034 Fax: 612-49216919 Email: James.Zhang.@newcastle.edu.au Abstract Since the beginning of the economic reform process in 1979‚ the Chinese currency (yuan) was devalued on many occasions until 1994 when the two-tier foreign exchange system was ended. While the official rate of yuan had been maintained
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Major Export and Import Products of China China is the largest exporter and second largest importer of goods in the world. Its major trading partners are from various countries which are European Union‚ United Stated‚ ASEAN‚ Japan‚ Hong Kong‚ South Korea‚ Taiwan and etc. As part of China’s continuing effort to become competitive in the global marketplace‚ China joined the World Trade Organization (WTO) in the year 2001. After China joined the WTO‚ it has benefited coastal cities especially in the
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The Yuan and Wal-Mart The world is facing economics problems. Exportation and importation is a contemporary issue that some countries have been talking about. There is the belief that some global business are not fare and that the money value of other countries do not help it to make it better for everybody. An excellent example is the value of the Chinese Yuan versus American dollars. Economists believe that the Chinese’s government is controlling and keeping their currency relatively low to get
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Mini-Case: The Revaluation of the Chinese Yuan 1. Many Chinese critics had urged China to revalue the yuan by 20% or more. What would the Chinese yuan’s value be in U.S. dollars if it had indeed been revalued by 20%? Answer: If the yuan had been revalued to Yuan 6.90/$‚ it would have constituted an increase in its value by 20% against the U.S. dollar: Yuan 8.28/$ − Yuan 6.90/$ × 100 = 20.0%. Yuan 6.90/$ 2. Do you believe that the revaluation of the Chinese yuan was politically or economically motivated
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Huseyin Kalyoncu et al. • Devaluation and trade balance in Latin American countries Zb. rad. Ekon. fak. Rij. • 2009 • vol. 27 • sv. 1 • 115-128 115 Preliminary communication UDC 339.56(8) : 339.15.054.23 Devaluation and trade balance in Latin American countries* Huseyin Kalyoncu1‚ Ilhan Ozturk2‚ Seyfettin Artan3‚ Kahraman Kalyoncu4 Abstract The aim of this paper is to examine effectiveness of devaluation on the trade balance in four countries: Argentina‚ Brazil‚ Mexico and Peru. We use
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