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Third devaluation in three days for the yuan by the Central Bank of China . The People’s Bank of China , again without warning, has fixed the daily exchange rate falling another 1.1% against the US dollar. Tuesday the bank had devalued the first time the Chinese currency by 1.9%, 1.6% Wednesday. A third operation of currency devaluation in a few hours it was absolutely unexpected, given that the first one was already defined by the Chinese authorities as a measure “ one-time ” with the aim of aligning the yuan to the values of market. But this time, however, the markets have absorbed the blow without jolts: after the rebound in Asian stock markets, all the European markets closed higher, with the pink jersey in Milan +1.56%.
It has also helped the that Wednesday Standard & amp; Poor’s has thrown water on the fire, talking about “technical correction” and denying that this is the beginning of a currency war. However they are far from overcome concerns about the possible impact on the European recovery . The moves of China put it sticks in the wheels of European Central Bank and its plan for the purchase of government bonds targeted to restart the ‘ inflation and the growth of ‘Eurozone. The reason is easily explained: the West, the yuan weak results through different channels (cost of raw materials and goods imported) in a drop in the price level . Contrary to the objective of Mario Draghi . In September, however, the Fed US is preparing to raise interest rates, given that the US economy is now divided. All of these factors threatens the fragile recovery in the eurozone. “The financial developments in China could have a negative impact more than expected because of the important role that this country in global trade,” it said in the minutes of the July meeting of the ECB itself, which at that now it referred only to the volatility of the Chinese financial market and not yet the effect was affected by the devaluation. This risk, says Frankfurt, “could be exacerbated by the negative effects of rising interest rates in the United States on the growth of emerging countries.”
Meanwhile the operations of Beijing are beginning to have repercussions in the political sphere . “Maybe on one thing Republicans and Democrats fully agree in this campaign for the US presidential election: economically China is playing an unfair game,” writes the Washington Post , explaining that, after the devaluation of the Chinese currency, US politicians of the two sides have shown themselves united in believing the intervention an outrage. A united front against the political manipulation of the yuan is only a month after arrival in the US president’s Xi Jinping : the first state visit by a Chinese president to the White House.
then remain concerns over the possible effects of the devaluation on the import to China (destined to become less convenient) and the resulting impact on the income statements of the Western companies that sell more in the People’s Republic. But according to Paul Gruenwald , chief economist of the Asia-Pacific S & amp; P, “exports are more dependent on foreign demand, the exchange rate plays a secondary role. There is no reason to think that this relationship has changed. ” Moreover, according to the rating agency, the devaluation of the yuan could avoid increased risks to the sovereign rating of the country.
Officially the goal of imposing more devaluation of the national currency the last 20 years, as explained by the deputy governor of Pboci Yi Gang , “is to let the market decide the exchange rate of the Chinese currency. And the PBOC will refrain from regular interventions on the foreign exchange market “, which will be maintained at a level” more or less stable “and” reasonable “.
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