Share
Explore BrainMass

Yuan: Policies

Regarding the controversy over the value of the Chinese yuan in foreign currency markets, can someone help me understand whether or not China is still using central bank foreign exchange policy to maintain the value of the yuan? In addition, I'm trying to grasp a solid understanding of what the current policy of the United States is on this issue and also from a monetary perspective, what is China's reaction to U.S. policy on this issue.

Thank you in advance for your assistance!

Solution Preview

China is still using central bank foreign exchange policy to maintain the value of the yuan. Actually, the value of Yuan is actively managed by the Chinese Central Bank. Its objective is to keep the value of the Yuan low. The Chinese Central Bank achieves its objectives by buying US currency and treasure notes in the open market. China keeps the demand for US dollar high. China has a large trade surplus with the USA and can buy the dollar equal to this surplus. China's central ...

Solution Summary

The answer to this problem explains policies relating to the Chinese Yuan. The references related to the answer are also included. Almost 300 words.

$2.19