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IMT 583 – How to Stop the Currency War

by on October 24, 2010

With bitter trade and currency wars between nations, particularly rich industrial and emerging economies, other smaller countries would have to pay the price.

China is not ready to revalue its currency while US wants this to happen or US dollar will devalue further. But if China revalues its currency, it incurs a heavy loss due to its huge US dollars reserves. Also, then China may no longer be able to export goods at a cheaper dollar price.  On the other hand, if China revalues, US might start in-house production that would help them boost their economy.

Source : http://www.economist.com/node/17251850/comments#comments

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