Hopes of USD Peg Removal Fade…

Written March 9, 2010 at 1:18 AM EST by  

Zhou Xiaochuan, the governor of the People’s Bank of China, has made a clear indication that Beijing is preparing to abandon its peg to the USD. In his statements, it was said that the peg was a measure to help China make it through the financial crisis. However, as markets digest the comments, some continue to winder if Mr. Zhou was suggesting a shift in policy may still be some time off. Further more, Beijing may need to raise interest rates or appreciate the currency to meet its target of keeping inflation below 3% this year.

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