China’s Currency Ceases To Appreciate

The yuan’s appreciation seems to have gone into reverse. Its managed rise against the dollar since it was unpegged in July 2005 ceased in September as the global slowdown started to affect China. As those effects intensified, and exporters were hit hard, the yuan has weakened again. There may be technical reasons as investors shun emerging market assets strengthening the dollar, but it is hard to set aside the assumption that China’s currency managers are being accommodating to the country’s hard-pressed exporters.

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