The renminbi rises

I noted in late November that China’s policy towards its currency might be changing.

Now we have evidence of this change, with a rather spectacular 0.9% rise in its value versus the US$ last week. This was the largest weekly gain since it was de-pegged against the $ in July 2005. And it seemed to result from a desire by the Chinese authorities to boost the currency in order to help get inflation back under control.

If China is really changing course in terms of the renminbi’s value, then we can certainly expect to be living ‘in interesting times’, as the Chinese saying goes, in the next few months.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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