Could China Devalue the Yuan?

Right now, there is speculation that China might end up with no choice but to devalue the yuan (also called the renminbi) if the economic situation doesn’t improve soon. Policymakers in Beijing have spoken out against the idea, but some analysts think that there might not be an option.

For now, China has things mostly under control. It’s true that recent data out of China has been somewhat lackluster, but so far it’s nothing that Chinese policymakers can’t handle. The question, says some analysts, is what happens when things are no longer controllable.
According to an analysis from Bank of America Merrill Lynch Global Research, there might be a chance that Beijing will have no choice but to devalue the yuan if things keep on as they are. Growth in China is slowing, and there is a chance that the country’s economy won’t meet its targets. With few tools left on the belt, some expect that the only option left to China will be yuan devaluation — a move that could take the currency wars up a notch.
It’s not likely right now, but some analysts warn that it could be possible in the future.
At 11:43 GMT CNY/USD is at 1.60038, CNY/EUR is at 0.140206, and CNY/GBP is at 0.104049.

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