Forex Blog: Currency Trading News & Analysis.

August 4th 2005

Bank of China warns speculators

In an unusual move, the Central Bank of China has posted an English message on its website: “The 2.1 percent adjustment does not mean that the Yuan exchange rate has been appreciated as a first step and that there will be further adjustments.” The message was clearly aimed at speculators, who continue to pour ‘hot money’ into China, in anticipation of future revaluations. China’s Central Bank has repeatedly tried to stem the inflow of capital, as it must spend billions to sterilize the flows and stabilize the Yuan, without triggering inflation. Despite the warning, and a drop in short term interest rates, speculators remain undeterred. They are not alone, as economists almost universally agree that another revaluation will take place in the near-term. The Tehran Times reports:

“The two percent revaluation has not relieved, and in fact has only intensified, yuan revaluation speculation,” said [a senior Chinese academic]. “What else is the central bank going to say in the face of mounting pressure?”

Read More: China battling renewed currency speculation despite dropping peg

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Posted by Adam Kritzer | in Chinese Yuan (RMB), Investing & Trading | No Comments »

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© 2004 - 2018 Forex Blog.org. Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.