IMF head: renminbi is very undervalued
The Chinese renminbi is “substantially undervalued,” IMF Managing Director Dominique Strauss-Kahn said at the Yalta European Strategy Annual Meeting. But, he added, too often that’s used as an excuse by rich countries to postpone structural reforms that would restore competitiveness:
The question of a revaluation of the renminbi should not be used as a curtain behind which you’re hidden to avoid to do what you have to do in your own country.
Strauss-Kahn noted that even a one-off revaluation of the renminbi by 20% would not right the world’s imbalances. Recently, while China’s trade surplus has decreased, America’s trade deficit has not.