What the Latest Currency "War" is All About
It took the Bank of China to devaluate the yuan on two consecutive days -- moving within the 2 percent band that it's allowed to -- for the proverbial global financial banshees to go completely bonkers.
Forget the hysteria. The heart of the matter is that Beijing has stepped on the gas in a quite complex long game; to liberalize the yuan exchange rate; allow it to free float against the US dollar; and establish the yuan as a global reserve currency.
So this is essentially exchange rate policy liberalization -- not a currency "war," as the frenetic spin goes from Washington/Wall Street to Tokyo via London and Brussels.
No comments:
Post a Comment