US should stop dollar depreciation now!

US should stop dollar depreciation now!
Apr 15, 2008 02:15
guest001	To shake off the adverse effect of the sub prime crisis, US Fed has tried its best including cutting the interest rates several times. However, it seems that cutting interest rates hasn’t taken effect very well. On contrary, it has forced dollar to fall seriously. The dollar depreciation has made China’s economy suffer a lot. It is said that the central bank of China has hold 1.68 trillion dollars foreign exchange reserve. Amongst the huge foreign exchange reserve, 70 percent are dollars. Someone calculates that China loses 80 billion dollars when RMB is appreciating 1 percent. The trade surplus of Feb. is 8.56 billion dollars, lowering than that of January, and 19.49 billion dollars. What’s more, China’s exports have been affected by quick RMB appreciation. Many factories have closed and their staffs have lost their jobs. According to some experts, RMB quick appreciation does have something to do with dollar appreciation. At the same time, dollar depreciation has caused damage to the world economies. During the World Bank/IMF meetings, the vice minister of China Finance Ministry calls on World Bank and IMF to urge those developed countries to implement responsible monetary and foreign exchange rate polices to get rid of the financial crisis. An expert says: “It is time for China to require US stop dollar depreciation now!” How do you comment on US Fed’s move---cutting the interest rates?

Apr 15, 2008 02:15

guest001

To shake off the adverse effect of the sub prime crisis, US Fed has tried its best including cutting the interest rates several times. However, it seems that cutting interest rates hasn’t taken effect very well. On contrary, it has forced dollar to fall seriously. The dollar depreciation has made China’s economy suffer a lot. It is said that the central bank of China has hold 1.68 trillion dollars foreign exchange reserve. Amongst the huge foreign exchange reserve, 70 percent are dollars. Someone calculates that China loses 80 billion dollars when RMB is appreciating 1 percent. The trade surplus of Feb. is 8.56 billion dollars, lowering than that of January, and 19.49 billion dollars. What’s more, China’s exports have been affected by quick RMB appreciation. Many factories have closed and their staffs have lost their jobs. According to some experts, RMB quick appreciation does have something to do with dollar appreciation.

At the same time, dollar depreciation has caused damage to the world economies. During the World Bank/IMF meetings, the vice minister of China Finance Ministry calls on World Bank and IMF to urge those developed countries to implement responsible monetary and foreign exchange rate polices to get rid of the financial crisis. An expert says: “It is time for China to require US stop dollar depreciation now!”

How do you comment on US Fed’s move---cutting the interest rates?

Apr 15, 2008 09:28

WCTMAN
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Join Date: Dec 17, 2005
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What’s more, China’s exports have been affected by quick RMB appreciation. Many factories have closed and their staffs have lost their jobs....An expert says: “It is time for China to require US stop dollar depreciation now!”

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When the RMB is allowed to free float against other world currencies, and its value in the market determined by the rules which govern this market, the Chinese govt. can offer some "advice" to other nations. If China wants to join the game, fine, come play. Until then, spectators cannot criticise how the game is played by others.

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