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UNDERVALUATION OF CHINESE CURRENCY Mohamed Ragab Mostafa Mazen ¥
AGENDA ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
THE RENMINBI 人民幣 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
FIXING THE EXCHANGE RATE ,[object Object],[object Object],[object Object],[object Object],[object Object]
AMERICAN TRADE DEFICIT ,[object Object],[object Object],[object Object],[object Object],[object Object]
CHINESE CURRENCY VALUATION
PURCHASE POWER PARITY (PPP) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
PURCHASE POWER PARITY (PPP) ,[object Object]
PURCHASE POWER PARITY (PPP) ,[object Object],[object Object],[object Object],[object Object],[object Object]
PPP LIMITATIONS ,[object Object],[object Object],[object Object],[object Object]
EQUILIBRIUM EXCHANGE RATE ,[object Object],[object Object],[object Object]
FUNDAMENTAL EQUILIBRIUM EXCHANGE RATE (FEER) ,[object Object],[object Object],[object Object],[object Object]
BEHAVIORAL EQUILIBRIUM EXCHANGE RATE (BEER) ,[object Object],[object Object],[object Object],[object Object],[object Object]
VALUATION SUMMARY Method PPP FEER BEER RMB Undervalued  by 20-25% 15%-30% 5%
IMPLICATIONS OF UNDERVALUATION OF CHINESE CURRENCY
ADVANTAGES OF UNDERVALUATION ,[object Object],[object Object],[object Object]
DISADVANTAGES OF UNDERVALUATION ,[object Object],[object Object],[object Object],[object Object]
CURRENT EXTERNAL PRESSURES ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
CHINA’S REACTION TO GLOBAL PRESSURE ,[object Object],[object Object],[object Object],[object Object]
FUTURE EXPECTATIONS ,[object Object],[object Object],[object Object]
FUTURE EXPECTATIONS ,[object Object],[object Object],[object Object],[object Object]
QUESTIONS ?

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Undervaluation Of Chinese Currency