| Yet the initial response from the Obama administration officials has been mild, even positive. “Greater exchange rate flexibility is important for China as it strives to give market forces a decisive role in the economy and is rapidly integrating into global financial markets”, the worldwide Monetary Fund said. They have urged China for years to switch to a market-based system but assumed that would cause the yuan to rise and help their own exporters.
“I think the yuan has become overvalued as other countries tried to cheapen their currencies and it will keep falling, playing catch-up”, he added. “Markets are taking fright at the recent move in the [yuan]”...............................................Full Article: Source
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