Trump Administration Labels China a “Currency Manipulator”: What’s behind the accusation, and who’s right?

© 2019 Farok J. Contractor, Rutgers Business School At 5 o’clock in the morning on August 5, 2019, unable to sleep, Trump tweeted about China—not for the first time accusing it of being a “currency manipulator,”[1] and describing this as a “major violation.” (See Figure 1 below.) Treasury Secretary Mnuchin followed with an official announcement … Continue reading Trump Administration Labels China a “Currency Manipulator”: What’s behind the accusation, and who’s right?

Advantages and Drawbacks of Undervalued Versus Overvalued Currencies

© 2019 Prof. Farok J. Contractor, Rutgers University UPDATE: See the August 11, 2019 post: Trump Administration Labels China a “Currency Manipulator”: What’s behind the accusation, and who’s right? Also See the Companion Post:  Is the Indian Rupee Undervalued or Overvalued? What Purchasing Power Parity Theory Tells Us Currencies can be undervalued (very devalued) for natural reasons, … Continue reading Advantages and Drawbacks of Undervalued Versus Overvalued Currencies

Four Salient Facts about the Chinese Yuan

© 2017 Farok J. Contractor, Rutgers Business School On February 23, 2017, just hours after his new Treasury secretary pledged a more methodical approach to analyzing Beijing's foreign exchange practices, President Donald Trump declared: "Well...I think they're grand champions at manipulation of currency. So I haven't held back.... We'll see what happens."  — Reuters Four Salient Facts: … Continue reading Four Salient Facts about the Chinese Yuan

Update: Is China a “currency manipulator”? Donald Trump says so

SEE UPDATED POST, AUGUST 11, 2019: Trump Administration Labels China a “Currency Manipulator”: What’s behind the accusation, and who’s right? © 2016 Prof. Farok J. Contractor, Rutgers Business School This article is a 2016 update of my original post of November 16, 2015. It has also been published on The Conversation as Does China manipulate its currency … Continue reading Update: Is China a “currency manipulator”? Donald Trump says so

IMF Elevates Yuan to Elite Currency Status: So what?

© 2015 Prof. Farok J. Contractor, Rutgers University Governor of the People’s Bank of China (China’s central bank) since 2002 and a cautious and methodical bureaucrat, Zhou is the essence of his country’s Mandarin class: canny and understated, but relentless in his objective to elevate China’s economy and currency to elite status. Under Zhou’s watch, China’s exports … Continue reading IMF Elevates Yuan to Elite Currency Status: So what?

Is China a “currency manipulator”? Donald Trump says so

© 2015 Prof. Farok J. Contractor, Rutgers University After 20 years, the Chinese government must be used to it—being bashed by US politicians and Congress as a “currency manipulator.” Indeed, the exchange value of the yuan (or renminbi [RMB]) is fixed each morning by its central bank, the People’s Bank of China (PBoC), with a … Continue reading Is China a “currency manipulator”? Donald Trump says so

Capital Outflows from China and the Hidden Story in China’s FDI Statistics

© 2015 Prof. Farok J. Contractor, Rutgers University Permission to Reproduce: A version of this post was published as  “The Chinese prefer investing overseas; dummy companies may ease transfers and devalue renminbi” by  YaleGlobal Online, September 10, 2015; it was the number-one story in a Google search for “China FDI” that day and is also available as a  podcast. The global panic … Continue reading Capital Outflows from China and the Hidden Story in China’s FDI Statistics

Hedging Transactions Involving Foreign Exchange Risk – A Primer: Falling in Love with a Puerto Vallarta Condo (Part C– Epilogue)

© 2015 Prof. Farok J. Contractor, Rutgers University CASE STUDY (C)—EPILOGUE: The Negotiated Settlement The two case studies presented examine foreign exchange risk from two perspectives: (Part A) An American couple has put a down payment on a lovely new condo in Puerto Vallarta, agreeing to pay 5,000,000 Mexican pesos on delivery of the condo in 12 months.  (Part … Continue reading Hedging Transactions Involving Foreign Exchange Risk – A Primer: Falling in Love with a Puerto Vallarta Condo (Part C– Epilogue)

Hedging Transactions Involving Foreign Exchange Risk – A Primer: Falling in Love with a Puerto Vallarta Condo (Part B)

© 2015 Prof. Farok J. Contractor, Rutgers University CASE STUDY (B): The Mexican Sellers’ Perspective The two case studies presented examine foreign exchange risk from two perspectives: (Part A) An American couple has put a down payment on a lovely new condo in Puerto Vallarta, agreeing to pay 5,000,000 Mexican pesos on delivery of the condo … Continue reading Hedging Transactions Involving Foreign Exchange Risk – A Primer: Falling in Love with a Puerto Vallarta Condo (Part B)

Hedging Transactions Involving Foreign Exchange Risk – A Primer: Falling in Love with a Puerto Vallarta Condo (Part A)

© 2015 Prof. Farok J. Contractor, Rutgers CASE STUDY (A): The American Buyers’ Perspective The two case studies presented examine foreign exchange risk from two perspectives: (Part A) An American couple has put a down payment on a lovely new condo in Puerto Vallarta, agreeing to pay 5,000,000 Mexican pesos on delivery of the condo in 12 months. ... CONTINUED … Continue reading Hedging Transactions Involving Foreign Exchange Risk – A Primer: Falling in Love with a Puerto Vallarta Condo (Part A)