Chillin' out till it needs to be funded
The Yuan came a full 3.7 c higher with the Renminbi/CNY now pegged at 6.798. Over the weekend, a new basket had been declared. The one that wasn’t really Dollar. Citi analysis suggested the Yuan is back to its flexible ways that lasted 2005-2008 and when the Yuan covered 20%. But plans are that the Yuan will be re-evaluated only one more time in 2010 and twice in 2011, thus stuck to the new peg at much the same pace. Every other currency is back to chasing the dollar, though.
Also Yuan did conquer Korea on Monday. This other Asian whipsaw that exchanges deficits and surpluses on GDP measurement every month, gave in to new Chinese supremacy. But Tuesday is here and the largely symbolic public edict from China ready to be buried, it’s policy understood. Much like Europe waits for Germany to stimulate demand domestically, China’s partners hoped for it to adopt the deficit. There are small gains of course from rising Chinese demand for imports, but it ain’t enough. So, more Ag Bank sells at $1 than in cents for the time being and the Real Estate projects are chugging along fine without the third mortgage. Kudos Beijing! we can also expect another $60-70 billion in Hi speed railway there after the $100b last year, but let me know if any other infrastructure is on the cards.