Business Daily from THE HINDU group of publications
Monday, Nov 09, 2009
ePaper | Mobile/PDA Version | Audio | Blogs
Business Daily from THE HINDU group of publications Monday, Nov 09, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Mentor
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Forex Web Extras - Financial Markets Money & Banking - Insight Columns - For the Asking Floating the yuan Why is China not floating its currency? Purushotham Kaushik, BhopalBecause a floating currency presupposes complete freedom for entry and exit of foreign capital. This does not sit well with the Chinese political system of dirigisme. China is a tightly controlled political economy. Its main aim is not to be macho in the marketplace but to be realistic and give employment to its masses. That is why it has been pursuing a strategy of export-led growth. And for exports to grow, the domestic currency needs to be devalued so as to make it profitable for the exporters. A floating currency may upset this delicately poised applecart of China. If the Chinese currency rules high in the currency markets, it would adversely impact its exports. S. MURLIDHARAN More Stories on : Forex | Financial Markets | Insight | For the Asking
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