| China currency is “no longer undervalued,” says the IMF.Undervalued, overvalued. Is it just me, or can nobody agree on the true value of the Chinese currency? There are many conflicting views. For now, the renminbi is akin to beauty: in some respects its value still lies in the eye of the beholder.
OK - but what’s behind the International Monetary Fund’s change of heart? For years, China’s currency was deemed to be undervalued because its “ external position” looked obviously unbalanced. The evidence for this was the country’s gigantic current account surpluses and accumulation of foreign exchange reserves. Economically, the theory goes, a country’s exchange rate has a meaningful influence on a country’s external position........................................Full Article: Source
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