Asian currencies unaffected by Yuan revaluation

When China revalued the Yuan by allowing it to appreciate 2% against the USD, experts expected other Asian nations to follow suit. An entire month has passed since the move, however, and the wave of Asian currency revaluations has yet to materialize. Despite promulgating its intentions to allow its national currency to appreciate, Malaysia has actively prevented the ringgit from fluctuating too much. The currencies of India and Thailand have also remained stubbornly locked in pre-revaluation trading levels. Hong Kong authorities have acted similarly, preventing the Hong Kong Dollar from fluctuating outside its tight trading band. Its political and economic relationship with China notwithstanding, Hong Kong has insisted it will not tamper with the HKD’s 21-year peg to the USD. The Economist reports:

Joseph Yam, head of the Hong Kong Monetary Authority (HKMA), the de facto central bank, said on July 21st, the day China moved, that: “No change is needed for the linked exchange-rate system, which has served us well and which we will keep.”

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