Saturday, August 15, 2015

Currency Pegs & Their Risks

The devaluation of the Chinese renminbi (Yuan) raises serious implications both economically and politically. The mere fact that a peg exists allows for political criticism as if this were some currency war. First, China acted with devaluing the renminbi for its economy to remain on an even keel, trying to keep growth and employment high. Secondly, China acted to help make its currency a pre-eminent global currency which helps promote the country's diplomatic goals and solidify the country's centrality to the global economy. However, these two goals can also emerge in conflict with one another.


Reuters: Financial Services and Real Estate

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