We expect the renminbi to rise by around 15% against the dollar this year (taking it to 6.20 yuan/$) and another 10% in 2009 (to 5.60). The faster pace of appreciation over the last few months has probably been kick-started by inflation concerns and global dollar weakness. Nonetheless, a recent tour of the country has reinforced our long-held view that China is ready to allow further currency gains as part of a package of measures to help rebalance the economy. This sea-change in policy will continue even if, as we expect, Chinese inflation drops back sharply and the dollar stages a partial recovery against other major currencies later in the year.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services