China to Strengthen Yuan With ‘Crawling Peg,’ Standard Bank Says
February 25, 2010, 5:53 AM EST
By Matthew Brown
Feb. 25 (Bloomberg) -- China is most likely to allow its currency to appreciate through a “crawling peg,” similar to the method it used to strengthen the currency between 2005 and 2008, according to Standard Bank Plc.
“When Beijing changed currency policy in 2005 it did not just revalue, it introduced a currency basket system as a step towards a more flexible renminbi,” Steven Barrow, head of Group of 10 foreign-exchange research at Standard Bank in London, wrote in a research report today. “The global credit crunch has forced it to stop this appreciation, but we don’t believe that it is going to go back and essentially link to the dollar with occasional one-off revaluations.”
“China engages in long-term planning and increased flexibility of the renminbi is part of that plan,” Barrow said.
The renminbi was little changed at 6.8268 per dollar as of 8:30 a.m. in London. It strengthened 0.1 percent on Feb. 22, the most in a year.
WOW Standard Bank in London did a research report on china....good grief did every bank do one this week? Boa, morgan, citi all did one this week.
February 25, 2010, 5:53 AM EST
By Matthew Brown
Feb. 25 (Bloomberg) -- China is most likely to allow its currency to appreciate through a “crawling peg,” similar to the method it used to strengthen the currency between 2005 and 2008, according to Standard Bank Plc.
“When Beijing changed currency policy in 2005 it did not just revalue, it introduced a currency basket system as a step towards a more flexible renminbi,” Steven Barrow, head of Group of 10 foreign-exchange research at Standard Bank in London, wrote in a research report today. “The global credit crunch has forced it to stop this appreciation, but we don’t believe that it is going to go back and essentially link to the dollar with occasional one-off revaluations.”
“China engages in long-term planning and increased flexibility of the renminbi is part of that plan,” Barrow said.
The renminbi was little changed at 6.8268 per dollar as of 8:30 a.m. in London. It strengthened 0.1 percent on Feb. 22, the most in a year.
WOW Standard Bank in London did a research report on china....good grief did every bank do one this week? Boa, morgan, citi all did one this week.