Yuan likely to remain stable for the coming months
It is true that individuals cannot trade the Chinese yuan (sometimes called the renminbi) on the FX market. However, movements by the yuan do affect the currency market, and impact other currencies. Right now, the Chinese yuan forex trading forecast is likely to be one of stability. Bloomberg reports on the Chinese yuan in forex trading:
“China’s policy of keeping a relatively stable currency will continue for at least a year,” said Lian Ping, chief economist at Shanghai-based Bank of Communications Ltd., part- owned by HSBC Holdings Plc. “Declines in exports won’t be reversed very soon, although the pace of the drop will be slower in coming months.”
The fact of the matter is that the Chinese yuan is not a free-floating currency, and the government has an extraordinary amount of control over it. As a result, it is possible for China to keep the yuan relatively stable. And right now it is likely to remain somewhat weak since the government wants to help exporters maintain an edge in this global economy.
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