Y
 

‡ Pegging: Maintaining the value with respect to

Dollar.

‡ De-pegging: Increasing the flexibility in the

currency policy.
m
   Y
 
‡ To preserve jobs in manufacturing sector during the
financial crisis.
M
  
2 3
: China had unified the exchange rate system and fixed
the Yuan's value at about 8.6 to a dollar.

2 2003: Yuan was pegged to the dollar at about 8.277 yuan a

dollar. The yuan was again revalued in 2005.

2 July 2005 to July 2008: The Yuan was allowed to

appreciate (steadily) by about 20 per cent against the
dollar.

2 July 2008: It was again re-fixed against the US currency at

6.83.
º Y
 

‡ External political atmosphere

‡ Hot money inflows

‡ Export sensitivity

‡ Labour competitiveness

‡ Real estate risk

Ñ Y   
‡ Chinese economy:
Ł Exporters to be the main losers.
Ł Chinese economy not to be affected much.
Ł China¶s Stock market: Airlines, Banks, Property,
Investment sector to benefit in short term and long term.

‡ World economy:
Ł Balance of trade would be maintained.
m      

‡ The Spot Yuan rate expected to move in narrow daily

ranges of at most 50 pips.

‡ Yuan can be expected to appreciate 3 percent in about six

months and 5 to 6 percent in a year, in line with the
progress of China's economic growth.


2 Business world, june 2030
2 DNA, 2
th june
2 Economic Times 20th june 2030
2 Hindu Businessline 22 june 2030

2 www.procurementleaders.com
2 http://in.reuters.com/article/idINIndia-


70320300620
2 http://www.bloomberg.com/news/2030-07-06/china-
bashing-over-yuan-needs-a-long-rest-commentary-by-
ronald-mckinnon.html
2 http://www.themalaysianinsider.com/business/article/e
uro-debt-crisis-opens-chance-for-yuan-depegging/