Nov 16, 2010 05:37 PM

The Overvalued Yuan


Regional Asian central banks have swiftly intervened to prevent the appreciation of their currencies, fanning tensions in an already heated global currency discussion. But the use of currency depreciation to revive exports only serves to introduce greater uncertainty and puts economies on a path toward weak recovery.

The stimulation of exports to promote economic growth remains an essential pattern of growth for countries around the world. Because of this, several economies have made reciprocal moves to depreciate their currencies. And yet with so many central banks echoing similar stances, one has to ask what currencies will be spared from these measures.

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