Sunday, March 3, 2013

China Is Prepared For A Currency War

Shinzo Abe told Japanese politicians in February that intervention on the markets is among the options being discussed. Photo: Bloomberg News

China 'Fully Prepared' For Currency War -- The Telegraph

China is "fully prepared" for a currency war, according to a top central banking official speaking in Beijing.

China's central bank deputy governor Yi Gang said: “China is prepared. In terms of both monetary policies and other mechanisms, China will take into full account the quantitative easing policies implemented by central banks of foreign countries.”

However, Mr Yi said a currency war can be avoided if policymakers follow the consensus reached at the Group of 20 nations meeting in Moscow last month.

A currency war occurs when a number of major economies compete against each other to devalue their own currency and lower the exchange rate. This cuts the price of exports from the country and makes imports more expensive – effectively boosting jobs as demand from both domestic and foreign markets increases.

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More News On China's Warnings of A Currency War

China well-prepared for currency war: official -- Xinhuanet
China warns US and Japan against waging a currency war -- The Australian
China "fully prepared" for currency war: banker
-- France24/AFP
China Official Says Ready To Battle Weak Dollar, Euro -- Forbes
PBOC’s Yi Says China Prepared for Currency War, Xinhua Reports -- Bloomberg Businessweek

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