The renminbi rises

I noted in late November that China’s policy towards its currency might be changing.
Now we have evidence of this change, with a rather spectacular 0.9% rise in its value versus the US$ last week. This was the largest weekly gain since it was de-pegged against the $ in July 2005. And it seemed to result from a desire by the Chinese authorities to boost the currency in order to help get inflation back under control.
If China is really changing course in terms of the renminbi’s value, then we can certainly expect to be living ‘in interesting times’, as the Chinese saying goes, in the next few months.

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