Feedback: Case Analysis #1 Chapter 10: The International Monetary System Closing Case: China’s Managed Float The closing case describes China’s exchange rate policy. For nearly a decade, China fixed its exchange rate to the dollar and bought or sold dollars to maintain the exchange rate. By early 2005 though, the country was feeling pressure both at home and abroad to let its currency, the Yuan, float freely against the dollar. [1]Why do you think the Chinese government originally pegged
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Case Study: China Revalues the Yuan and Moves to a Managed Float Regime, July 2005 Since early 1997, the Chinese government had pegged its currency, the yuan (or renminbi), to the U.S. dollar at a rate of Yuan8.28/$. The Chinese government had maintained this peg even through the difficult Asian currency crisis later in that year, when many emerging Asian countries were forced to abandon their pegs. China argued for years that a fixed and stable currency was critical for the development and
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Summarize and evaluate the arguments presented in the (A) case for and against the revaluation of the Renminbi. Provide your own assessment of the projected future direction of the RMB/USD exchange rate (using info provided in the case). China’s decision to release its currency from the decade long peg (approx. 8.28 Yuan per USD) raised multiple concerns within the global economic community. Many economists welcomed the decision while still others questioned it. Below is a brief description of the
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What was the impact of China’s exchange rate policy on doing business with and “against” China? The Yuan(RMB) is loosely pegged to the U.S dollar, although China claims that its currency value is managed against a basket of currencies. China has been accused of illegally keeping the Yuan fixed against the U.S dollar. By keeping their exchange rate low, in particular against European currencies, some argue that China gained an unfair competitive advantage in trade. Between 1978 and 2004, GDP in
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Chinese managed Float-format Summary : One of the ways China's economic rise was accomplished was by pegging its currency, the Chinese yuan to the United States dollar and instituting trading arrangements between the two nations. One of the arguments yuan against dollar is that it appears that China benefits more than the U.S. Manufacturers in the U.S. often put pressure on Congress to lobby China to appreciate its currency, citing the difficulty of competing against artificially cheap Chinese
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amount of yen required? DQ #5 (Due by Thursday, January 16th 11:59 pm) Read the Case: China’s Managed Float (p. 371) and then answer the following questions: Why do you think the Chinese government originally pegged the value of the yuan against the U.S. dollar? What were the benefits of doing this to China? What were the costs? What do you think the Chinese government should do? Let the float, maintain the peg, or change the peg in some way? Period 4 (January 20th – 23rd)
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TO: FROM: RE: China’s Renminbi Valuation Discussion The following memo provides a summary of the basic discussion of the valuation of China’s Renminbi, the tumultuous situation surrounding global discussion regarding its valuation, and what appreciation of the Renminbi might mean for the global economy. This analysis is based primarily upon the Fung & Wong article, “China’s Renminbi: ‘Our Currency, Your Problem’?”. Valuation Controls Placed Upon the Renminbi Over the past couple decades
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HW#1 Finance 463 Shapiro 9 Student: ___________________________________________________________________________ 1. Historically, the primary motive for U.S. multinationals to produce abroad has been to A. lower costs B. respond more quickly to the marketplace C. avoid trade barriers D. gain tax benefits 2. The primary objective of the multinational corporation is to A. maximize shareholder wealth B. maximize world production C. minimize debt D. minimize the cost of doing business globally
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support Asian countries' economy growth, while more open capital accounts marginally reduce growth facing financial crisis. Taglines/Pull Quotes: * “The majority of Asian countries have some form of flexible regime that we term an intermediate float” * “The marginal impact of public investment is consistently larger than that of private investment” * “The results confirm our earlier expectation that the recent crisis had little impact on Asian growth” Marketing Recommendations: Relevant
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1.0 Introduction Since early 80s, the new policy that opened China to the world had gained great impacts on this country’s economy. To have a further understanding about the China’s currency, we analyze the historical movements of the Yuan (CNY) towards its trading currency pair – the US Dollar (CNY/USD) in a 20-years period till now, argue the policies adopted and other factors that caused such movements of the Yuan in the past. In addition, how arbitragers buy and sell CNY using 2 point, 3 point
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