Depreciation of the yuan

No case for complacence

Print edition : September 18, 2015

The People's Bank of China in Beijing. The immediate provocation for a renewed round of investor panic was the sharp depreciation of the yuan over three days starting August 11, which brought its value down by more than 3 per cent relative to the dollar. Photo: PETAR KUJUNDZIC/REUTERS

The collapse in commodity prices, led by oil and copper, has compounded the problems associated with devalued and weakened currencies, particularly in the emerging markets. Here, at a crude oil well site at North Dakota in the U.S. Photo: Daniel Acker/Bloomberg

The Chinese decision to use depreciation of the yuan as an instrument to address its own crisis can trigger a chain of events that can convert the recession the world has been trapped in for the past six years into another deep and full-fledged crisis.
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