The appreciating renminbi

Philippe Bacchetta, Kenza Benhima, Yannick Kalantzis 09 January 2013

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In the recent US presidential campaign, China was accused again of currency manipulation. In other words, the Chinese central bank is accused of maintaining the exchange rate at an artificially low level compared to its equilibrium value, including heavy intervention in the foreign exchange market. There has been a fierce debate on this issue in recent years, including on VoxEU.org (e.g., Persaud 2011, Reisen 2011, Reisen et al. 2011, Storesletten et al. 2010).

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Topics:  Exchange rates

Tags:  China, Currency manipulation, Currency wars

Half a century of large currency appreciations: Did they reduce imbalances and output?

Helmut Reisen, Moritz Schularick, Edouard Turkisch 02 March 2011

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Over the past decade, several emerging market economies – China in particular – have run substantial and persistent current-account surpluses. Loose monetary policy in the US could now result in higher domestic inflation within these emerging economies and lead to the sort of real currency appreciation that many countries want to avoid (Bergsten 2010 and Huang 2010).

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Topics:  Exchange rates International trade Monetary policy

Tags:  US, China, Currency manipulation, exchange-rate policy

Why China's exchange rate is a red herring

Avinash Persaud 10 April 2010

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“Blame foreigners for domestic woe” is the sad but unsurprising cardinal rule of politics, followed by even the most ardent internationalist. After seven years of a consumption binge in the US, evidenced by a negative personal savings rates, excessive leverage, historically high employment levels and record international deficits, commentators in the world's largest economy did not conclude what every macroeconomic model indicated – that US fiscal and monetary policy were too loose.

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Topics:  International finance

Tags:  Currency manipulation, Chinese exchange rate

Currency “manipulation” and world trade: A caution

Robert W. Staiger, Alan O. Sykes 30 January 2009

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The Chinese yuan was pegged from 1994 until mid-2005 at 8.28 yuan to the US dollar. China shifted in 2005 to a policy of loosely pegging the yuan to a basket of major currencies. Since then the yuan has appreciated against the dollar, and the current yuan/dollar exchange rate stands at roughly 6.84. Over the same period, the yuan generally depreciated against the euro, falling from 10.06 in June 2005 to 10.79 in June 2008. With the recent financial crisis, however, the euro has depreciated and the yuan/euro exchange rate presently stands at 8.99.

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Topics:  Exchange rates International trade

Tags:  China, renminbi, Currency manipulation, yuan undervaluation