Global Economy: RMB Exchange Rate Depreciation

- Oct 09, 2018-

1. [LME Week] Financial Times (China) Editor-in-Chief/James Kynge said: The United States abolished the original free trade agreements such as Mexico and Canada, and wanted to establish a new trading system that would not allow China to find a back door to enter the US market. It is the practice of arbitrarily specializing in resetting the global trade order. The United States may move toward export control and follow the footsteps of the former Soviet Union. Some business groups will put pressure on the US government. The technology market is a global market, and the United States cannot prevent the pace of China's technological development.

2. The chief economist of the IMF is not worried about China's ability to maintain the RMB exchange rate. Reuters Indonesia Nusa Dua October 9 - International Monetary Fund (IMF) chief economist Obersfald said on Tuesday that he is not worried about the Chinese government's ability to maintain its currency, despite the recent depreciation of the yuan. However, he also said at the press conference that China will face a careful trade-off between supporting economic growth and ensuring financial stability. Obersfeld said that the financial market over-emphasized the short-term trend of the RMB and said that the RMB has been recovering from the turbulent period very quickly in recent years. Obersfeld said that the IMF has always suggested that the Chinese authorities should focus on economic growth from quantity to quality and sustainability to improve the ability of the economy to withstand shocks. Obersfeld said that government officials have been trying to control China's credit expansion. In the face of trade tensions with the United States, they will take measures to boost economic growth. It is understandable that these measures have already produced short-term economic growth. The impact and affect the RMB exchange rate. “They really need to balance these initiatives with the need to further stabilize the financial industry and deleverage. They must increase control over local government financing. This will definitely be a balanced approach for them.”