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Can someone please explain this?.. Watch

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    How does China devalue it's currency against the US dollar?

    Please as detailed as possible, I need to get my head around it haha

    Thank you in advance
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    They fix the exchange rate against the dollar. Hence no matter how much it should go up against the dollar, it remains the same value. Thus their exports, which mainly go to America, remain as competitive as they have been (which is very).

    That's a basic explanation, it's almost certainly more complicated than that.
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    (Original post by Super Mario 64)
    How does China devalue it's currency against the US dollar?

    Please as detailed as possible, I need to get my head around it haha

    Thank you in advance
    http://www.wellesley.edu/Economics/w...e%20213-05.pdf

    This explains fixed exchange rate systems pretty well - all you have to consider is that the Yuan is a 'fixed float' - it is allowed to fluctuate between narrow bands.
 
 
 
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