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China Planning A 20% Yuan Devaluation By Next Year?

It looks like China is not done devaluing the yuan despite reassurances from top officials at the People's Bank of China that last month's currency devaluation is a one-off occurrence.

According to a report from research firm IDEAglobal, China is planning a massive 15-20% devaluation (not a typo) of its currency by year end 2016. IDEAglobal says the information in the report published late Tuesday comes a "reliably-informed Asian source."

China made a move to devalue the renminbi / yuan in August to try to help exports as the Middle Kingdom is trying to deal with a weakening economy and shaky financial markets.

Statement from IDEAglobal source

The IDEAglobal source noted: "Having achieved a 3 percent move in a few weeks, they would not want to stop here. Their ultimate target is probably a 15 to 20 percent minimum move in the trade-weighted index."

More on China's plans for yuan devaluation

The report included a question and answer session with the source, who argued Chinese authorities were looking for an additional 6% drop in the yuan by the end of the year and another 10% by year end 2016.

The source argued that the push for a weaker yuan by the PBOC must be viewed in the context of the decline in other Asian currencies such as the Japanese yen that have provided a competitive edge to exporters in...


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