Read on Twitter
Been off twitter for a while, but coming on to tweet something that could be worrying and needs to be monitored. The below is the chart of Chinese currency, the Renminbi (RMB). It has significantly appreciated in the last 4-5 months:
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Why would China, which is in the midst of a trade war with the US, and much of the rest of the world, and at the risk of losing manufacturing businesses to India, allow its currency to appreciate vs. the US dollar? A stronger RMB makes its exports unattractive.
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Why would China, which is in the midst of a trade war with the US, and much of the rest of the world, and at the risk of losing manufacturing businesses to India, allow its currency to appreciate vs. the US dollar? A stronger RMB makes its exports unattractive.
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Note that China has ample forex reserves to manage its currency at low levels (in fact thats what it is accused of having done for so many years). So why appreciate now, so much, and in so little time?
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Note that China has ample forex reserves to manage its currency at low levels (in fact thats what it is accused of having done for so many years). So why appreciate now, so much, and in so little time?
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One explanation could be that China is gearing up to import. But import what? Food? Commodities? Metals? Weapons? Oil? The significant size and pace of RMB appreciation suggests that China may be stocking up. But stocking up for what?
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One explanation could be that China is gearing up to import. But import what? Food? Commodities? Metals? Weapons? Oil? The significant size and pace of RMB appreciation suggests that China may be stocking up. But stocking up for what?
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Given its aggressive posturing at the Indian border. A seemingly China dove being elected in the US, I cannot help but wonder if China is stocking up for a potential military action against India, if not someone else. I sincerely hope the government is monitoring
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Given its aggressive posturing at the Indian border. A seemingly China dove being elected in the US, I cannot help but wonder if China is stocking up for a potential military action against India, if not someone else. I sincerely hope the government is monitoring
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the pattern of imports (food, metals, commodities) by China to ensure that this suspicious (for lack of a better word) and counter intuitive strengthening of the Chinese RMB is NOT an imminent threat to national security.
the pattern of imports (food, metals, commodities) by China to ensure that this suspicious (for lack of a better word) and counter intuitive strengthening of the Chinese RMB is NOT an imminent threat to national security.
Quick shout out/ credit to @nilesh_agr ji who was discussing this concern with me earlier today.
