| China : Exchange rate Change affects Jiangsu textile enterprise
"Constant changes in RMB exchange rate in 2006 certainly had big impact on our company, but not fatal. We still achieved some profits after mentally preparation for the changes in exchange rate" said Mr Yao, manager of finance department from Jiangsu Hongye International Group.
The changes in the exchange rates are uncertain, it takes some time for the payment of goods to reach the company's account after the shipment. When the payment comes, the exchange rate has changed, the bank will transfer the US dollars into Renminbi according to the exchange rate by the day, so the currency exchange rate risk is all on enterprises. "Originally one dollar can be exchanged for 8.27 yuan, now it is below 7.8 yuan, the profit margins have been compressed." Yao said.
The Group chairman Liu Sui Chi said, "The monthly export amount of our Group is over US $20 million.
Paulson, in Congress, Sides With Japan on Yen (Update1)
Feb. 7 (Bloomberg) -- Henry Paulson's defense of Japan's currency policies over the last week is forcing traders to pay more attention to a U.S. Treasury secretary than they have in years. Paulson caused fluctuations in the yen at least three times in the past week by responding to questions about whether it is undervalued, as alleged by some Democrats and European finance ministers. He sparked an hour-long slide yesterday when he told the House Ways and Means Committee that the currency is set in an open market and that Japan is still struggling with deflation. The market reaction reflects Paulson's credentials as a former chief executive officer of Goldman Sachs Group Inc., the world's largest securities firm by market value, as well as the fact that he has rarely spoken on the subject.
RMB hits new high against US dollar for three consecutive days
The value of the Renminbi (RMB) yuan against the US dollar hit a new high for the third straight day today with a central parity rate of 7.7798 yuan to the dollar, according to the Chinese Foreign Exchange Trade System.
The central parity rate was 7.7938 yuan on Monday and 7.7895 yuan on Tuesday.
Wednesday's exchange rate also marked a new high of 0.99698 yuan to the Hong Kong dollar.
The value of the Renminbi (RMB) yuan overtook the HK dollar on Monday for the first time, with a central parity rate of 0.99945 yuan to one HK dollar. The central parity rate was 0.99886 yuan on Tuesday.
The central parity rate against the euro hit a new high of 10.054 yuan and the central parity rate against the British Pound was also a record at 15.2575 yuan.
Insiders have ascribed the continuous appreciation of the RMB to China's growing trade surplus and foreign exchange reserves.
Today's World Currency - The Fiat Standard
One of the main factors contributing to the global financial crises of the 1990s was that of the fiat currency standard. The South East Asia financial crises of 1997 led to the devaluation of the local currencies. The human costs of this crises was major hardship for the people, especially the poor, of the region. This period saw incredible rates of devaluation of the local currencies. These are summarised below. Currency Devaluation - Exchange rates relative to the US Dollar on 16 February 1998 compared to end of June 1997 .
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