IMF urges China to appreciate currency [View All]

[denem]

Source: Radio Australia

The head of the International Monetary Fund says it is important for China's currency to appreciate to achieve a more balance economy.

The IMF managing director, Dominique Strauss-Kahn, is visiting Beijing, which has been coming under growing international pressure to let it rise because it artificially reduces the prices of its exports.

China's central bank said last week it would consider major currencies in guiding its currency, but a senior minister has played down expectations of a policy shift.

It says it needs a low currency to help many more millions of people to trade their way out of poverty.


Read more: http://www.radioaustralianews.net.au/stories/200911/2744767.htm?desktop

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China can say what it likes. The problem is:

$27.8 US trillion dollars held in US Treasuries.

Sure it could float the Yuan, up around 20%, take a $5 to $6 US trillion loss on the chin, but then what?. Without a currency fixed to the Dollar, they will be looking elsewhere.

We concentrate on US consumption, and Chinese dumping. The flip side is Chinese saving. How about a $5 trillion dollar loss: front, center and everywhere? They're not that stupid.