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The Impact of Currency Manipulation

December 24, 2019


Boosting your exports and limiting your
exports by pursuing a exchange rate
can only work as a long ass days one country doing
that or very few countries of course know if on the path to restore
the major players or that same time you know I marked on
that strategy of course a the entire global trading
system we left collapse this is at Brookings weekly in-depth look at the issues
behind the news this week dire consequences currency china continues to undervalued its
currency to make its exports cheaper and its coffers bigger say some legislators and business
leaders it’s a practice that harms US competitiveness and impairs the growth other emerging
economies from the white house to capitol hill the
US is increasingly focused on the issue and some project a currency war
nonresident senior fellow Dominica Lombardi says China’s longtime currency manipulations
are harmful indeed but war it’s a long way off there is no
doubt to that the and evaluation under Chinese stuff
currency as being out openly pursued by the
chinese authorities and this is really on although 10 their
dealers a himself pursuing an export-led
strategy which has certainly continuity and Jim
seventy dynamism own their own economy over the
I last few years that’s ok which is not
enough to really escalate a currency war did treat your with given by D a announcement by the US Federal Reserve
to I start yet another face I’ll hyper
expansionist monetary policy the so-called acutely to which eso
course a triggered a every action by a number
of that emerging economies which are being
flooded by donors I they’re being pressures thing gym so
their own currency to appreciate well if we’re not currently engaged
fully engaged in a currency war then could one arguably say that we’re
standing at the precipice have a currency war certainly there are
some concerning a scene of and I this singing of the car the protracted stance on the chinese authorities not to
allow their exchange rate to be fully determined by
the market to despite their I’m public statements I there is a a further complicating factor
which is right now the US monetary policy which
is of course you know designed to support the have project I laugh economic recovery but as
as a side effect you know the a.m. the effect over clearly weakening dollar in the US there
is really a great concern about a a currency issue in Europe I would say
this is law is the less strongly but not because
it is fast enough some my no way it’s just
that because there is no centrally that is not century fine
political authority because to a how to monitor your set-top this concern do not easily feed into the
policy making machine at the EU level what’s the real tension
here I think the source of tension is a you know more on setting the boundaries you know on how
far each player can go is a growing sense of
frustration among US companies that I’m they a don’t feel is a level playing field in
China the Chinese having I’m sufficient number
a restriction seen procurement rules for instance that to do discriminate against foreign
companies and a I think rightly so the
administration is trying to pursue it broader agenda
vis-a-vis the Chinese not just by focusing on narrow issue
with the exchange rate met by you know but they’re pursuing a
broader agenda that would enable US companies to benefit from hadn’t establishing a more
robust presence in China and so that you know they can
really benefit from from the name is modest emerging
economies wow how does all of this affect emerging economies if the Chinese turn off to a more forward a and allow more flexibility in their
exchange rate clearly there is the risk that to their
relationship with the other emerging economies which shows some of I know pension
clearly this emerging economies so far have resisted from openly challenging the Chinese in that
regard I that a if the Chinese not sure you know any flexibility and there is
threatening injuries that a.m. we could see a break happy in the Pronto new engine economies
I’m and and i think im this is really where
the challenge lies nowadays and no one really knows at which point
you know where again I’m we may have showed this break happy now
this tension erupting and long and wrenching economy has the g20 or the IMF
had any real success in dealing with this
issue in the context of the recent the g20 summit in korea last november it was agreed
that China would become the number three
share or your own game and or the other a mean emerging
economies the so-called BRICS wheeler a featuring the top attention
older Saudi situation and of course this is be
intended objective holding this a reforming the going on so you’re in
math is indeed to provide emerging economies
with more I’m more rights a greater Voice but at the same time also the
month from them with a responsibility angry
accountability for the management Odee global economy stay up to date with the latest research
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