China Keeps a Tight Rein on Yuan a Decade After End of Peg
(Bloomberg) -- China's push to loosen the grip on its tightly-controlled currency saw a breakthrough ten years ago today when the dollar peg came to an end. Bloomberg Television's David Ingles looks at what's changed in the decade since. (Source: Bloomberg)
Ten years after China scrapped a yuan peg against the dollar, the central bank is again anchoring the exchange rate to the greenback. Witnesses to the 2005 float say too much has changed for that to last.
The economy is now five times bigger, having overtaken Japan and Germany, and the yuan has risen to become the world’s second most-used currency for trade finance. Currency watchers of the time, including U.K. government official Jim O’Neill and ski gear entrepreneur Benedikt Germanier, say the yuan will sustain its gradual ascent. While it has appreciated 34 percent since the 8.3 per dollar peg ended, it’s in the fifth month of a pause at 6.2.