TITLE

The Chinese RMB: Its Value, Its Peg, and Its Future

AUTHOR(S)
Chu, Ted H.
PUB. DATE
April 2005
SOURCE
Business Economics;Apr2005, Vol. 40 Issue 2, p7
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
The valuation of the Chinese renminbi (RMB) has drawn lots of attention lately and a great deal of pressure on the part of developed nations for revaluation. In addressing the issue of valuation, this paper develops a new purchasing power parity (PPP) index of China's exchange rate and finds that the while undervalued, the undervaluation is neither unusual nor bad policy. Moreover, China's overall external trade balance does not seem to be that far out of equilibrium. China's desire to join the G-7 club is likely to result in abandoning its peg, however, despite the increased risk to its economic development.
ACCESSION #
16987979

 

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