China allows a 2.1% increase in yuan evaluation [View All]

[Robert Oak]

The People's Bank China, the country's central bank, said it would immediately allow the yuan to rise from its current 8.28 to the dollar to 8.11-an increase of about 2.1 percent. With the former fixed peg, Chinese manufacturers were able to produce relatively inexpensive products in comparison to U.S. exports. The undervaluation has been partly responsible for the loss of approximately 1.5 million jobs to China last year. Economists estimate that China's currency manipulation has resulted in substantial undervaluation of the yuan, perhaps by 40 percent or more. According to China, there will be a move towards a managed floating exchange rate regime based on a basket of currencies.

http://biz.yahoo.com/prnews/050721/dcth061.html?.v=15

http://news.yahoo.com/s/ap/20050721/ap_on_bi_ge/china_currency;_ylt=AvLVwVqQ3fOfEkhgQFj5Afis0NUE;_ylu=X3oDMTA3bGI2aDNqBHNlYwM3NDk-

They said an incremental 0.3% each day but I still can't tell if they are going to truly float the yuan or just give this modest reevaluation and then peg it again (there will be a move...what does that mean, yes or no?)