Relevant and even prescient commentary on news, politics and the economy.

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How Undervalued is the Yuan?

…of RMB-appreciation looks pretty moderate. By the last update I received, non-deliverable forward foreign exchange contracts were suggesting a total appreciation of about 8% over the next twelve months. That…

Interest in China’s Exchange Rate

You know that people are a bit on edge regarding China’s exchange rate policy when this story is one of the top news items (at least as of 1pm EDT)…

The Exchange Rate and Import Prices

…fact, the chart below illustrates that the connection between the exchange rate and import prices is surprisingly weak. A strong dollar should make imports cheap, and a weak dollar should…

The IMF’s Flexible Credit Line

…rare. If the country is experiencing exchange market pressure, ordinarily we would expect to see increased bond spreads. Moreover, exchange market pressure could be a reaction to domestic macroeconomic instability,…

I side with China on this one

…rate. “The RMB exchange rate has drawn close to a reasonable and balanced level, given the international balance of payments and the market supply and demand for foreign exchange,” Ma…