IMF urges allowance for yuan to appreciate

IMF is urging China to allow appreciation of the yuan, while simultaneously warning that an uncontrolled fall in the US dollar could have disastrous effects on world markets.

IMF voiced concerns that the yuan should reflect the true value of China’s economy. If artificially kept low, the global economic imbalance could adversely affect world financial markets. Figures given include a US trade deficit of USD 68 billion dollars, of which USD 20 billion deficit is with China. Not allowing for an increase in the yuan could also spark off protectionist measures in Washington to reduce the US trade deficit.

China restricts gains in its currency to a maximum 0.3 percent per day.  

 

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