Home / Knowledge / News / Voices in favour of RMB depreciation get louder
Voices in favour of RMB depreciation get louder
08
Jan '09
An entirely free floating exchange rate of the RMB will still have to wait for some more time, but the unexpected international financial crisis has disrupted the pace of RMB exchange rate reform. Poor demand in international market has created steep pressure on exports of Chinese enterprises since July 2008 and voices in favour of a free floating RMB have got louder.

A survey made by Reuters in December 2007 had expected that one US dollar would fetch 6.84 Yuan in exchange by the end of March this year, 6.83 Yuan by the end of June, and 6.80 Yuan would be exchanged into one U.S. dollar by the end of December.

From the second half of 2008 onwards, orders from overseas markets have substantially reduced due to the drag of the financial crisis and business failures in the Yangtze and the Pearl River Delta are growing. In addition, since the beginning of the exchange rate reform in July 2005, the RMB has revaluated by nearly 20 percent.

This has significantly eroded profits of enterprises and the ones who were operating on very low margins have got in to serious trouble with all of them expected to face more disasters if the RMB appreciation was to continue in the current year. However, most domestic foreign exchange analysts believe that the RMB is more likely to decline throughout the year.

A report from Haitong Securities Research Institute points out, in accordance with the purchasing power parity (PPP) which is calculated by ratio of commodity prices in different countries, one dollar should fetch 7.55-8.00 Yuan, but in accordance with the interest rate parity, RMB depreciation rate against the U.S. dollar could reach 49.7 percent in the future.

The RMB is expected to maintain a relatively stable trend amid consolidation during most of the time in the current year, though the Yuan might moderately decline to alleviate export pressure, if economic situation continues to deteriorate and might devaluate by less than 3 percent.

Fibre2fashion News Desk - China

Must ReadView All

Apparel/Garments | On 24th Apr 2017

ColDesi launches latest direct to garment printer

ColDesi, a pioneer in the direct to garment printer business, has...

Textiles | On 24th Apr 2017

US’ textile manufacturers applaud Buy American order

US' National Council of Textile Organisations has favoured President...

Courtesy: NASA/JPL-Caltech

Textiles | On 24th Apr 2017

NASA designing advanced woven metal fabrics for space

Scientists at NASA are designing advanced woven metal fabrics for a...

Interviews View All

Nishank Patel
Shri Dinesh Mills Limited

Broad range of fabrics will sell well this financial year

Angelina Francesca Cheang
MY ANJE

'Consumers in the age-group 21 to 38 are driving the activewear trend'

Rahul Bhadani
Looksgud

Navigating through catalogues is a bit hasslesome

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Ashok Desai
Bombay Textile Research Association

Bombay Textile Research Association (BTRA) is a leading name in textile...

Marcel Alberts
Eurofibers

Coating at a fibre level is a practice not usually seen in the...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH
April 2017

April 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search