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Will the Yuan’s Fall Force China to Re-energize Reforms?
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Will the Yuan’s Fall Force China to Re-energize Reforms?

Knowledge at Wharton·@HashtagPLUS·about 1 month ago
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China’s move last week to allow the yuan to shed value by nearly 3% against the U.S. dollar is a step towards market-determined currency rates, although stability remains doubtful. At a broader level, the devaluation trains attention on China’s growth model and the unsustainable practices it needs to unlearn, say experts. Between Tuesday and Thursday of last week, China’s central bank — the People’s Bank of China — allowed the yuan to fall to its lowest level against the dollar in four years. The bank typically controls the currency’s movement by permitting trades within a specified range of a reference rate it sets daily. The yuan’s devaluation caused a selloff in global stock markets and commodity markets, triggered by fears that China could launch a currency war to boost its sagging exports. However, the central bank intervened on Friday by raising its reference rates in an attempt to prevent a panic downward spiral.…

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