IMF Says Chinese Yuan No Longer Undervalued

For years, China has been criticized for keeping its currency from strengthening too much against the dollar. But those days may be over — the International Monetary Fund has declared that the yuan is “no longer undervalued.”

“Appreciation over the past year has brought the exchange rate to a level that is no longer undervalued,” according to an IMF statement.

China’s yuan, also called the renminbi, has risen about 0.5% against the U.S. dollar in the last year.
The IMF’s take on this marks a significant shift, and comes as Beijing continues to promote the yuan as a global reserve currency for central banks — an alternative to the dollar.

China has historically kept tight control of its currency — favorable exchange rates have helped boost exports and manufacturing over time. But China has continued to draw ire from the U.S. government for keeping it artificially low.

China continues to set its daily exchange rate, allowing the yuan to fluctuate within a fixed range. Beijing has begun to loosen its grip — last year, the central bank doubled the permitted trading range for the yuan.

via CNN

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.