Effects Of Devaluation Of Rmb On China Essay

2127 Words9 Pages
Effects of devaluation of RMB on China
Qiluo Zhang, Lucy, 988139
GE 2021 W02, Dr. Richard J. Braxton
November, 12, 2016

Introduction The Chinese Central Bank devalued the RMB on August 11, 2014 which was the largest drop in the RMB ever. And the devaluation continued for two days and accumulatively knock 4.4% off the value of RMB on August 13, 2015(COUGH & BRADSHER). While Chine grew to become the second largest economy in the world, RMB, as the national currency of China has been gaining in value steadily and such a sudden downward move raises worldwide attention. The problem is that the devaluation of the RMB has caused the slowdown of Chinese manufacturers. As a result, Chinese companies will lay-off employers. Devaluation of RMB is a monetary policy which affected the people in many aspects. It could influence every consumer, worker and investor in overseas buying power, export trade, cross-border investment and wages. Nowadays, with soaring commodity costs, house price and unstable stock, the people in China are under high pressure and we should improve our concern about the monetary policy. Because it relevant to people’s life and business closely, it is important to explore the long-term trend and the political intent of valuation of RMB. The purpose of this paper is to examine how leaderships decide to devalue the RMB and the effect of the decision. The paper will focus on the process of the decision making of Chinese Central Bank. And this research will
Get Access