China devalues ​​surprise yuan to try raise export – AGI – Agenzia Journalistic Italy

19:29 August 11, 2015

(AGI) – Rome, Aug. 11 – Step surprise China: the central bank decided to devalue the yuan by nearly 2% against the dollar to boost exports. European stock markets and Wall Street go down ‘, especially collapse luxury stocks.
Depreciation and’ the most ‘significant since 2005, when the Chinese currency was dropped from the dollar. China’s central bank, the People’s Bank of China fixed the exchange rate today at 6.2298 against the dollar, a depreciation of 1.86% compared to yesterday, when the exchange rate was set at 6, 1162 against the greenback. The devaluation comes after the latest figures published at the weekend marking another heavy fall in exports, slumped by 8.3% in July, and a decline on an annual basis by 5.4% the index of producer prices. The exchange rate of the yuan moves within a fluctuation band of the day 2% against the dollar, based on the value fixed daily opening of markets by the central bank of China. The move
and ‘defined an “extraordinary depreciation” by the same China’s central bank, and follows the spread of rumors about the possibility ‘that the central bank could increase the trading band of the yuan, fixed at 2% in March 2014, and while Beijing tip inclusion of its currency in the global reserve currencies, with the US dollar, the Euro, the pound and the yen. The decision of the IMF on the inclusion or not of the renminbi between special drawing rights will be ‘taken in November.
Among analysts and’ widespread opinion that the devaluation of the yuan will serve ‘primarily to tow exports, to a minimum of six years, although the new move seems to move away from the will ‘repeated more’ times in recent years by the government to restructure the economy on a development model more ‘focused on domestic consumption. The central bank’s decision and ‘one “shock” for markets, said to Agi Fraser JT Howie, an economist and author of “Red Capitalism – The fragile financial foundation of China’s extraordinary rise”. According to the analyst, “China’s strength and ‘completely gone. The last month and’ bubble burst and the markets today and ‘disappeared the idea that a stronger Chinese currency was one-way. It’ a big decision, charging implications – Howie continues, – The economy and exports are weak and China is losing competitiveness ‘”.
Among the most’ pessimistic, the devaluation of the yuan could signal a new chapter in the currency war, as they see the analysts IG, but, beyond ‘the initial shock, the move could be resized in perspective. “War and ‘it started long ago and China and’ late addition – continues Howie – I do not expect a ‘another such move in a short period of time, even if the central bank may decide to move downward rate exchange to further weaken the yuan. However, this is a small step: the yen and ‘increased from 60 to 120 “.
In the medium term the consequences could be” odious, “said Howie, with the result that” more and more ‘money could leave China on fear of further weakening. In addition’, many Chinese companies have borrowed money abroad to invest in China and now have worsened their exposure by 1.9%, and their revenues Renminbi equivalent today to fewer dollars. ” (AGI).