Business Daily from THE HINDU group of publications
Monday, Sep 07, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Monday, Sep 07, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
|
|
|
|
|
Mentor
-
Financial Markets Columns - For the Asking China-dollar connection
Why is China reluctant to float its currency and position it as an alternative to the US dollar? Pundarikash Basu, Kolkatta
This suggestion has been made time and again especially in the context of the most enduring paradox of the last year or two – how come the US dollar is ruling the world despite the US economy being in a shambles. To be sure, the Chinese currency, the renminbi, is highly undervalued, to boost Chinese exports. The ploy has paid rich dividends. But now China finds itself in an unenviable situation – it has more than $2 trillion invested in the American bonds market. If it makes any precipitous move, much of its investments would vaporise. China and the US thus have a symbiotic relationship – China needs US’s market and the US needs Chinese products. Moreover, the US dollar has entrenched itself during the last six decades. It is the undisputed world currency. True, China now has a domineering presence in every facet of international relationships transcending economics, but it remains as inscrutable as ever. In the event, its currency may not receive the kind of universal acceptability that the US dollar has. S. MURLIDHARAN More Stories on : Financial Markets | Forex | For the Asking
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
|
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2009, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|