The Fall Of The Renminbi Triggered Concern About The Exchange Rate War.

< p > it is reported that the recent sharp decline of the "a href=" http://www.91se91.com "RMB" /a "exchange rate is likely to further worsen Sino US trade relations and may cause concerns about a currency war in Asia.

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The Central Bank of China has intervened in the market since the end of 2. The yuan has fallen by 2.8% against the US dollar so far this year, almost all the gains of last year.

The RMB exchange rate has been rising steadily over the past ten years, but now it has entered a rare stage of weak trend.

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According to people familiar with the idea of the central bank, the central bank believes that it is necessary to lower the RMB to make speculative P go away.

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"P," these people said, central bank officials also believe that the market factors in the decision to play a more important role in the RMB exchange rate measures also exacerbated the weakness of the renminbi.

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< p > as a measure of opening the financial system, the Central Bank of China doubled the RMB trading area in March 17th.

Chinese officials said that as concerns about the recent slowdown in economic growth, market participants saw the expansion of the trading range as a clue to the sale of the renminbi.

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< p > the Chinese government believes that the RMB is approaching its reasonable value, which can be seen from China's continuously narrowed < a href= "http://www.91se91.com/news/index_s.asp" > trade < /a > surplus.

Yi Gang, vice president of the people's Bank of China, said at an economic forum in Beijing on Saturday that the exchange rate will be determined by the market from an increasing degree, and that the central bank's intervention in the market will gradually weaken.

However, US officials, politicians and other Asian countries believe that China is deliberately maintaining the renminbi below the market value so that exporters can take advantage of the competition in the overseas market.

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Jacob Lew, the US Treasury Secretary, welcomed P's expansion of the RMB trading range and said it was a step toward greater exchange rate flexibility.

However, according to a statement by the US Treasury Department, Lu said last week when he spoke with Vice Premier Wang Yang of the State Council last week that the United States believes that China has more ways to achieve the exchange rate marketization.

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In the report submitted to Congress in October last year, the US Treasury criticized China's intervention in the foreign exchange market and argued that the Renminbi should appreciate significantly to get close to the market determined exchange rate level. P

The yuan has fallen by more than 2% against the US dollar since October last year.

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Moreover, the continued decline of the P may also push Asian countries to weaken their currencies.

In the past year, Japan's economic recovery has been boosted by monetary easing and the weakness of the yen, causing tensions between Japan and its export rivals such as South Korea.

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Last year, when the foreign capital withdrew from other emerging markets, the renminbi rose strongly against some currencies. P

Strict capital account control provides protection for the renminbi.

When the yuan remained stable against the US dollar, other emerging market currencies such as the rupiah and the India rupee depreciated sharply.

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Prasad Eswar Prasad, an expert on Chinese issues at Cornell University and a senior official of the IMF of the former International Monetary Fund (P), said that a new round of tension around the issue of exchange rates could emerge if the Central Bank of China believes that the Central Bank of China can suppress the RMB exchange rate by intervening heavily in the foreign exchange market.

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P Lhasa Pu said that as the funds began to return to some emerging a href= "http://www.91se91.com/news/index_s.asp" > market < /a >, the fall of the Renminbi or the Central Bank of other countries or regions faced more pressure on avoiding currency appreciation, especially in the Central Asian region.

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(P) it is true that China's trade surplus has narrowed over the past few years as Chinese policymakers adjust their economic models to make the economy more dependent on consumption and less dependent on exports.

Many people expect that the renminbi will continue to rise later this year due to the influx of capital.

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< p > however, some observers believe that the recent decline in the renminbi shows that China still values export competitiveness.

After the expansion of the trading range, the RMB went down for four consecutive trading days, but it stabilized on Friday.

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P, a London based research firm, estimates that China's central bank bought about $25 billion last month to keep the renminbi down.

So far, China has not used its $3 trillion and 800 billion a href= "http://www.91se91.com" > foreign exchange /a reserves to support the renminbi.

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Fred Bergsten, a senior research fellow at the Pedersen Institute for International Economics in Washington think tank, said he was surprised at how fast the Chinese government had allowed the renminbi to fall in such a long time. If this trend continues, the US Congress and other institutions will again criticize China's manipulation of the RMB exchange rate, P Fred.

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Brown, member of the US Democratic Party and Senate Finance Committee, called on Thursday that Congress should pass a bill to impose sanctions on China, P.

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< p > Brown said that as the Chinese government continued to lower the RMB exchange rate, the urgency of Congress to resolve the issue of currency manipulation through bipartisan bills has increased.

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< p > in the first two months of this year, China's economy has weakened considerably, leading to a growing concern that China's economic growth may further slow down from its current level of about 7.5%.

China's top leaders are facing tough choices as to whether or not economic reform measures such as controlling credit growth should be put aside.

These economic reform measures may be a drag on economic growth in the short term.

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P, according to a person familiar with the matter, the Central Bank of China is waiting for more data to decide whether monetary policy needs to be relaxed.

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< p > beggars said that China's use of the RMB exchange rate to respond to signs of economic problems or exacerbate tensions between the parties.

He said it is clear that China is facing new serious problems.

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