Chinese Monetary And Fiscal Policies

1893 Words8 Pages
It is important to understand the Chinese Yuan 's prediction and impacts since this second world leading economy can influence global economic issues through changes in its currency’s value. In order to forecast the future of Renminbi, it is essential to understand the past and current issues that affect its value. Throughout the essay, the definition of Chinese exchange rate will meant by the value of the Renminbi against the US dollar.There are many factors that could affect the value of the Chinese Yuan, but mostly through the power of the regulatory system. This essay will explain the Chinese monetary and fiscal policies that China has recently used with the description of how these regulations could determine its exchange rate within the short-term. Furthermore, this essay will wrap up with a discussion of ideas and thoughts about the prediction of the Renminbi in the long-run after the exciting news of being included in the reserve currency basket in late 2015. One of China’s main economic objectives is to move from export-led growth to a more sustainable driven growth - domestic consumption. In order to achieve this, the government has made many changes in the economic regulation, especially the monetary policy. The monetary policy is mainly referred to decisions of the money supply’s size and growth rate within the economy, that are made by the central bank or other regulatory authorities. In March 2016, Chinese bank’s reserve requirement has dropped another 0.5%
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