China reduced the value of its currency in an attempt to boost its struggling economy, several news outlets reported this morning (Aug. 11). The move is the largest one-day fall in more than a decade and is causing worldwide speculation about how it will affect the global economy.
“It was expected and it wasn’t,” said NACM Economist Chris Kuehl, Ph.D. “There had been more than a few comments regarding the tactics that China might employ to get its economy moving again and devaluing the currency was always something that was mentioned but never given that much credence.”
The Peoples Bank of China (PBoC) has chosen to reduce the value of the yuan, Kuelh explained, “as a ‘one-time’ effort to boost the competitiveness of Chinese exports—even as they acknowledge that this will make imports more costly.”
Be sure to check out NACM’s eNews this Thursday for a more in-depth story on China and its economy.
- Jennifer Lehman, NACM marketing and communications associate