| China devalued its currency to a five-year low against the US dollar on Wednesday, sending global stock markets tumbling. The devaluation so far has been minor, from an exchange rate of 6.2 to the dollar last summer to 6.55 now. So, why are markets so jittery?
First, look at what China says it is trying to do. Last month, China's central bank started publicising a trade-weighted index of its exchange rate to highlight the fact that the currency has appreciated a lot. Ten years ago, there was broad agreement that China's currency was seriously undervalued. ..............................................Full Article: Source
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