I think it is interesting that insiders feel policy makers in China are now considering a free float Yuan as inflation picks up speed in their economy. Previously, the country has tried increasing interest rates and bank reserve regulations as a means of slowing inflation.
In my opinion, it might be that a free float Yuan is the last resort to avoid a financial collapse for China.
The following article provides some details:
Hughes, Siobhan, 2011. Geithner sees china shifting on yuan. The Wall Street Journal, Feb. 16.
A free float currency will definitely slow inflation for the Chinese economy. I very much hope that China adopts this international policy.
No comments:
Post a Comment