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Policy measures may be warranted if Yuan falls further: RBI

By Religare

The RBI has said that policy measures may be warranted to counter any long-term plan by the Chinese to push the Yuan down to gain an edge on exports, media reported.

Commenting on the issue, Reserve Bank of India Governor Raghuram Rajan told the media, "If it's part of a process of getting competitive advantage through... longer-term depreciation, it has to be worrisome across the world, partly because you could have tit-for-tat actions."


"Part of the decline in India's exports which have dropped for the past eight months in a row - could be due to adverse currency movements," he added.

As per reports, the Yuan depreciation has led to a weakening of emerging market currencies across the board as international investors believe that sliding commodity prices and a slowing Chinese economy will erode the value of their investments.

Some economists are of the opinion that the Chinese devaluation is a policy move aimed at reviving its slowing economy through exports amid sluggish domestic demand.

Story first published: Friday, August 21, 2015, 23:00 [IST]
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