| Can RMB appreciation curb inflation? | |
|---|---|
| Mar 18, 2008 03:35 |   |
 | Since last year, RMB has been appreciating very quickly. However, the prices has also been increasing very fast. Why do prices surge? Can RMB appreciation curb inflation? Those policy makers have different views on this issue. According to Reuters, reasonable RMB appreciation can ease inflation to some extent. Zhou Xiaochuan, the president of central bank of China. Chen Demin, the minister of the Department of Commerce, said that RMB appreciation couldn't settle the inflation in China. What do you think of it? Can RMB appreciation curb inflation? |
| Mar 18, 2008 04:24 | #1 |
| Appreciation of the yuan = higher product price for export=less products consumed overseas=decrease in Chinese jobs=less Chinese purchasing power=deflation. In regards to the financial scenario (stocks, bonds, and other instruments) I'm not qualified to answer that. Get Marrie. Thank you....dba Drgaryaquack. |
| Mar 18, 2008 09:08 | #2 |
| Jimmy, Prof. Gary is a talented sharp watcher and an engineer as well. He taught me that DEFLATION is reflected in long-term bond yield curve is sloping down (signal of recession). Following Bear Sterns (the best brokerage firm in wall street, whose employee’s pension funds were now wiped off to almost nothing at a whim!), the other brokerage firm Lehman brother is another target facing the storm. Herd behavior in mkt is pretty pretty scary, but somebody wins, somebody loses, it’s zero sum game. It’s hard to say yesterday’s burst of financial sector reflects micro economy, but it does drives micro economy. |
| Mar 18, 2008 09:10 | #3 |
| typo: financial sectors do drive MACRO economy! |
| Mar 18, 2008 22:21 | #4 |
| Gary, you and Marrie are real financial analysts or professors. According to your formula, RMB appreciation doesn't benefit China but causes many problems. What should we do to curb inflation, to raise the interest rates? The rumour says that China is likely to increase the interest rates. Do you think it is helpful? |
| Mar 18, 2008 23:02 | #5 |
| china int. rate is negative compared to higher inflation rate. so there is room for adjusting interest rate up. |
| Mar 19, 2008 21:19 | #6 |
| Marrie, many economists have the same views with you. However, the central government didn't raise the interest rates. Instead, the reserve ratio will be increased by 0.5 percent since March 25th. Some say that it is a signal that the government tries to save the stock market.What do you think? Does it help counter inflation? BTW, it is not likely that China will raise the interest rates in near future since the reserve ratio has been increased. |
| Feb 2, 2009 22:44 | #7 |
| GUEST11662 | According to Demand / Supply principles, appreciation generally means more demand than supply of the currency. There might me remedies to curb inflation, like adjusting interest rates. Whatever you name, Adam Smith's invisible hand will give treatment for the issue finally. But one thing is how and when the hand will play would be a topic. |
| Mar 26, 2010 21:51 | #8 |
| GUESTCACTABE... | Check this Out! This morning I received a answering message from 9722840600 Or 972-284-0600 and I thought the call was a scammer. Guess it was a bad case of the "Mondays" - cause I went nuts - and called gov and screamed at the top of my lungs. Make a long story short Gulf Coast Western -an Oil Company- was calling was returning a call from last months interview - telling me I got the job Any idea how to uncomplain and fix this??? |
Post a Reply to: Can RMB appreciation curb inflation?
Copyright © 1998-2024 All rights reserved.