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How do you float a dollar?

Yuan may resume float against foreign currencies in 2010. How far will it rise against U.S. dollar?

  • Virtually all economic analysts agree that the yuan will easily break through 6 yuan = US$1 shortly after float is restored. Some project 3.5 yuan = US$1 within 5 years. What do you ...show more

  • Answer:

    I'm not so optimistic that China would allow RMB to float vs foreign currencies freely in the near future, US$1 = RMB below 6 is almost certain that the Chinese govt will not allow it happen any time soon. Reason is simple, not until China's economy can be successful converted to domestic driven as opposed to the current state of export driven, my assumption of above holds. China's time scale of letting Shanghai to become the next important financial market in year 2020 would be about right given all its circumstances. Until then there're far too many things that the country has to work on.

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The yuan will float up but I think 3.5 in five years is optimistic unless the US keeps spending money they don't have. The US wants the Yuan to go up. Powerful Yuan makes our repayment that much lower. America needs to stop printing money or the Dollar will soon become useless.

Dave, the ATM machine man.

I think that Chinese government will try to keep RMN rates as low as it could to benefit foreign exchange rate.

mali

Even if the yuan does strengthen, the US government won't be happy about it and might call the PRC govt. to change the value of their RMB. That's what happened to Singapore during the econ. crisis. The US govt. got the Monetary Authority of Singapore to reduce the strength of the Singapore dollar against the US dollar. However, all depends on how inclined China will be to the wishes of the USA.

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