yuano

For years, policymakers thought it was not worth trying to get Beijing to stop manipulating the renminbi, yet that view was mistaken. They ignored the fact that the Chinese were undermining the consensus that the market should determine currency values. Now it seems it is too late to rescue the system of free-floating currencies. Abe’s plan to cheapen the yen, otherwise inexcusable, is a defense against the fixed yuan and the falling greenback. Ben Bernanke’s dollar-weakening moves, which hurt America, are in retaliation against Beijing. Beijing will not relax its grip on the renminbi even though it claims the currency is “pretty much close to the equilibrium level.” Of course the yuan is not, because the Chinese central bank is continuing to determine exchange rates.