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Thread: Manipulating exchange rates

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[quote=APAULT                  ,32890]Hey Griz, I don't worry about exchange rates but I have a differnt view to Pinetree (sorry mate), for if we only discussed things over which we had some control, we wouldnt have much to talk about.China is deliberately keeping the rate low so as to maximise exports and discourage imports.  Quite a good policy to keep the economy booming.  Sure if cheap goods are being exported they are not available for home consumption, so yes the local population is losing out perhaps - in the short term.  Yes, the city people are the buyers of the imported goods and would benefit from a change in the rate BUT there is such a growing divide between rich and poor, the government is unlikely to be too concerned.Hand in hand with this, the massive trade surplus means that China has massive currency reserves.  Instead of just using it now for even more development it is holding back.  It invests large amounts oeverseas so spreading its risks, and it has reserves for when the inevitable slowdown begins.Sure the US is complaining and technically has a good point, but with its giant agriculture subsidies, refusal to allow some foreign companies to buy US assets, and general manipulation of markets whenever it has the chance, why should anyone take any notice of them?  Go for it China, develop![/quote]

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