[ad_1]
At 18:01 Norwegian time on Friday, the firepower for the trade war between the United States and China continued. Initially, the United States levied tariffs on Chinese goods worth $ 34 billion.
Two hours later, China arrived on the railway and promised to reimburse customs with the same coin. China handles its own currency, the Chinese yuan, according to Olaf Chen, senior portfolio manager and manager of global distribution and interest rates.
– If the Chinese central bank weakens the currency, it could weigh the penalty. Because the currency applies to all goods, not just to those who have been charged extra customs, the positive effect can weigh more than the negative customs, "he said, pointing out that it was only speculation at the moment.
Chinese central bank that rate will remain stable.
May result in capital flight and exchange rate
The purpose of US Customs is to make More expensive Chinese goods, making American products more competitive.
– When a currency falls in value, it becomes cheaper to buy It means that by weakening the currency, Chinese goods can cost as much as & # 39; 39, before Customs.
Nordea Markets' main strategy, Leif-Rune Rein, believes that the weakening of the currency will create uncertainty in the Chinese economy.
– It is prob you can fear it, but it's not the first tool they'll use, "Rein says.
According to Rein, the devaluation of the currency can lead to the stock market and the flight of capital, because the investments will be less interesting
– If China is ready to lower the currency without creating turbulence on the markets,
been made earlier
June the Chinese currency fell 3.3 percent against the dollar, the biggest drop of a month ever. Professor of Economics and former head of the Chinese Department of the International Monetary Fund (IMF) told the Financial Times that there may be two reasons for the devaluation.
– Either this indicates that the price is more expensive than before, or China could try to inform the United States that they have this instrument in the trade war.
China has weakened the currency several times between 2005 and mid-2014, which has led to more allegations that the country would deliberately unfairly have a competitive advantage, the newspaper writes. (Terms)
[ad_2]
Source link
