Yuan revaluation may not boost textile exports: The revaluation the Chinese currency may not bring about any major benefit to Indian textile exporters as the appreciation of the currency is small to have any major impact, according to exporters and analysts. It was unlikely that major buyers would be moving base to India because of yuan appreciation.
Surprised Markets After a decade of a steady appreciation against the US dollar, investors had become accustomed to the stability and growing strength of the yuan. Most currencies also reeled. While some argued that the move signaled an attempt to make exports look more attractive, even as the Chinese economy's expansion slowed, the PBOC indicated that the devaluation was motivated by other factors.
The SDR is an international reserve asset that IMF members can use to purchase domestic currency in foreign exchange markets to maintain exchange rates. Inthe yuan was rejected on the basis that it was not "freely usable.
China's economy depends significantly on its exported goods. While many American politicians grumbled, China was actually doing what the U. What Causes A Currency Crisis?
If these nations are debt-ridden and have a heavy dependence on exports, their economies could suffer.
For instance, Vietnam, Bangladesh and Indonesia greatly rely on their footwear and textile exports. Impact on India For India in particular, a weaker Chinese currency had several implications. The Indian currency immediately plunged to a two-year low against the dollar and remained low throughout the latter half of Normally, a declining rupee would aid domestic Indian manufacturers by making their products more affordable for international buyers.
However, in the context of a weaker yuan and slowing demand in China, a more competitive rupee is unlikely to offset weaker demand going forward. Additionally, China and India compete in a number of industries, including textiles, apparels, chemicals and metals.
With slower exports and a stronger U. While fears of additional devaluations continued on the international investment scene for another year, they faded as China's economy and foreign exchange reserves strengthened in Watch video · The yuan maintains a close relationship with the dollar and trades 2% in each direction from a midpoint selected by China.
Today, that midpoint went from yuan per U.S. dollar to yuan revaluatin impact of the textile industry in Zhejiang Province and Countermeasures Abstract: The appreciation of yuan in Zhejiang textile Industry is a "double-edged sword." In this paper, both negative and positive aspects of their analysis of the impact proposed to overcome its negative impact on some of the feasibility of countermeasures.
On August 11, , the People’s Bank of China (PBOC) surprised markets with three consecutive devaluations of the yuan renminbi or yuan, knocking over 3% off its value.
The revaluation of the yuan and the likelihood that it will continue to appreciate in time to come has raised concerns for the continued competitiveness of China's textile industry, which has.
However, this argument confuses revaluation of China’s exchange rate with a shift to a floating exchange rate. The Commission does not recommend floating the yuan at this time. Instead, China should significantly revalue the yuan upward while maintaining capital .
Hanke, who was an adviser to the Indonesian government during the Asian currency crisis, says a major revaluation of the yuan would devastate China’s economy.