VOICED : China devalua el yuan

China has devalued the yuan by nearly 2% against the dollar to stimulate its slowing economy, particularly its exports. The yuan's stability, controlled by Pekín, has been challenged by its recent appreciation against the euro and yen, affecting exporters. Speculation suggests China may widen the yuan's trading band to enhance flexibility. This move aims to include the yuan in the IMF's currency basket but raises concerns among Asian economies about competitiveness. However, a prolonged devaluation could lead to capital outflows if investors fear asset depreciation.

What was the primary reason behind China's decision to devalue the yuan?

• To increase foreign investments

• To boost its exports

• To strengthen the yuan against the dollar

• To reduce inflation

How does Beijing maintain the stability of the yuan compared to other emerging market currencies?

• By allowing free market fluctuations

• By pegging it to the euro

• By tightly controlling its fluctuation

• By increasing interest rates

What potential change is China considering for the yuan's trading band?

• Removing it completely

• Fixing it permanently

• Expanding it to 2%

• Narrowing it to 1%

What concern do other Asian economies have regarding China's yuan devaluation?

• Loss of trade agreements

• Higher inflation rates

• Increased import costs

• Reduced competitiveness of their currencies

What risk does a prolonged devaluation of the yuan pose to China?

• Higher inflation

• Trade surplus

• Capital outflows

• Increased foreign debt