Business Report: Howard Dicus on Chinese Currency Devaluation

If China manipulates its currency, how does that work? Most currencies, including our own, float freely on world currency markets, rising or falling daily based on who’s buying dollars or selling yen or dumping rubles or whatever. What China does is SET a conversion rate daily, a range in which the yuan can trade. It seems to be loosely based on market forces, but China has never let anyone see the sausage factory. Still, the International Monetary Fund reported just a couple weeks ago that China’s currency is roughly where it ought to be. The former head of the IMF’s China division says the currency manipulation charge is difficult to support on the basis of objective criteria. Free traders think we’re trying to awaken the dragon to no particular effect. And that’s Crisis at a Glance.

Business Report: Howard Dicus on Chinese Currency Devaluation