Why China Is Secretly Manipulating Currency To Make The Yuan Stronger

China’s move to make the yuan stronger seems to contradict the traditional belief that China has been intentionally making its currency weaker to gain export advantages.

Since he took office, President Trump has greatly toned down his campaign rhetoric calling China a “currency manipulator.” He gave his reason for the shift in a tweet on April 16, 2017: “Why would I call China a currency manipulator when they are working with us on the North Korean problem? We will see what happens!”

Since then, North Korea conducted four more missile tests, so the North Korea problem isn’t improved, and China’s central bank has quietly intervened in the currency market—not by making the yuan weaker but by making it stronger. As a matter of fact, the yuan recently surged to its highest level against the U.S. dollar in six months. China’s central bank’s move to make the yuan stronger seems to contradict the traditional belief that China has been intentionally making its currency weaker to gain advantages in its export sector. So what gives?

…continue reading

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