Can Beijing Hang Tough?

Pressures mount for China to devalue or face turmoil

For a few terrifying hours, traders in Asian markets thought they were witnessing the start of the next Asian crisis. On Jan. 25, bourses from Seoul to Singapore plunged after an article in the Chinese press suggested a devaluation of the yuan could boost the sagging economy. Nervous traders quickly concluded a devaluation was coming that could force battered countries like Thailand and Indonesia to devalue their currencies again to remain competitive--and just when things were starting to look better in Asia. Only vigorous denials by Beijing officials, including central bank Governor Dai Xianglong, restored calm.

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