Risks and opportunities of revaluing the renminbi

Revaluing the RMB could add to the global economic risk. But the revaluation standoff will have positive impact on China''s liquidity, reform and the RMB forwards market.

The US and Europe have recently joined the call from Japan demanding China to revalue the renminbi RMB. There is also a belief that RMB revaluation would pull Hong Kong out of its economic doldrums. Meanwhile, China's central bank is sounding an alarm on inflation threat stemming from a robust economy and property punting, making RMB revaluation a sensible policy to curb inflation.

Think again. It might not deliver the hoped benefits, but could instead add to...

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