I was watching Bloomberg at around 7:00 AM ET when Brian Sullivan of Bloomberg broke the news
: China finally let the yuan revalue. Furthermore, Xinhua, the official government news agency, said the country was adopting a managed floating exchange rate. Granted, the preliminary move is relatively small at +2.1%: from 8.28 yuan to the dollar, it's now 8.11 yuan to the dollar. I've got to hand it to the Chinese officials. When they said that they'd perform this feat at an unexpected moment, they sure meant it. Commentators on Bloomberg suggest that this move is just a precursor to more moves. Rest assured that it's a whole new ball game.
Credit should be given where credit is due. Around the 22nd of June, I noted that the Hong Kong dollar--which was (is?) often used as a proxy for the yuan--started to be monitored on Bloomberg TV's Asia edition
. This listing was strange for, like the yuan, the Hong Kong dollar wasn't exactly a flexible currency. I said that this portended a yuan revaluation, and sure enough, it was. Folks, watch Bloomberg. If it can offer more hints like this one, it's as good as gold. This just in: Malaysia has followed suit in ditching its fixed currency regime.
Posted by Emmanuel |
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