New Interest Rate Increase? - CPI up 7.1%, $1 = 7.15 yuan
From China Daily - the Government's English National newspaper: "The
People's Bank of China, the central bank, set the yuan's central parity rate at
7.1574 to the greenback, up from Monday's 7.1667."
From Xinhua Press, the Chinese Government's Press (in English): "Surging consumer prices inChina
As my students astutely pointed out, we expect the People's Bank of China (the Federal Reserve Bank of China) to raise the required reserve ratio and interest rates SOON!
(See my website under February 20 for the clipped articles.)
Brief Analysis: If the yuan appreciates, exports to the U.S. become more expensive and imports into China (from the U.S.) are cheaper. China hopes to cool inflation by making cheaper imports available. This is a chance for U.S. manufacturers - to sell here and compete more easily in the U.S. (and abroad).
From Xinhua Press, the Chinese Government's Press (in English): "Surging consumer prices in
As my students astutely pointed out, we expect the People's Bank of China (the Federal Reserve Bank of China) to raise the required reserve ratio and interest rates SOON!
(See my website under February 20 for the clipped articles.)
Brief Analysis: If the yuan appreciates, exports to the U.S. become more expensive and imports into China (from the U.S.) are cheaper. China hopes to cool inflation by making cheaper imports available. This is a chance for U.S. manufacturers - to sell here and compete more easily in the U.S. (and abroad).
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