Renminbi's exchange-rate impacts China's trade
China's trade balance is sensitive to fluctuations in the renminbi's real effective exchange rate, new research from the Bank for International Settlements posits.
The research shows that a 5% real appreciation of the effective exchange value of the renminbi, would have led to a reduction in export volume of about 7%. However, the analysis also shows that real currency appreciation also reduces imports to China, which limits the net impact of exchange-rate policy on the trade surplus.
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