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 the global economic risk at the time when the world economies are struggling to climb out of a synchronized slowdown. China is unlikely to give in, while international pressure will not ease soon. This standoff...

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222