China’s confirmation that it will allow the yuan to appreciate against the dollar sent global stock markets higher Monday. The policy change is likely to help US manufacturers and exporters as it will make US-produced goods less costly for Chinese consumers, and could result in an increase in goods imported into China.
Chinese authorities also hope the more costly yen will reduce inflationary pressures and forgo the need to increase interest rates. China was recently forced to invoke several new regulations to cool a rapidly expanding property sector that come critics warned was approaching “bubble” status that threatened the entire economy.
Source: Associated Press
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