Mecklai graph: Appreciation of Chinese Yuan in 2013
Mecklai graph of the day: The Chinese Yuan appreciated to high of 6.1532 against the U.S dollar since the government incorporated the official and market exchange rate devaluing Yuan at the end of 1993.
Mecklai graph of the day: The Chinese Yuan appreciated to high of 6.1532 against the U.S dollar since the government incorporated the official and market exchange rate devaluing Yuan at the end of 1993.
In the past years the Chinese have been accused of purposely keeping the Yuan's value artificially low, to boost their exports in the global market scenario and also to give the Chinese manufacturers an unfair competitive advantage threatening global markets. Since the start of 2008 the Yuan has been on a progressive trend of appreciating and has reached its highest mark of 6.15 even though its growth has slowed down to 7.7 percent. The Yuan has risen 1.2 percent since the start of 2012 though it weren't supported by economic fundamentals. Recent data has indicated the pick-up in the world's second biggest economy remains fragile. China recorded a rare trade deficit of USD 880 million in March. China's official manufacturing PMI for April fell to 50.6.Further more, the easing policies by U.S, Japan and the European central banks have led investors to drive capital flows into emerging markets and China being one of hub. The appeal of the Yuan as an investment vehicle is growing globally and attracting more foreign investors than it ever did before. If the trend continues the Yuan still has alot of potential to grow further. On other hand, pressure from developed region could enforce PBOC to tighten the rules and as expected china unveiled new measures to curb currency speculation that helped Yuan to appreciate. Similar more moves by the central bank could rein currency strength in medium term to fall back above 6.20.The below graph depicts the devaluation of Yuan in 1994 and the appreciation in 2013
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