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Risk Management

Do it when it Fits, but Do it in one Bold Step!

When the People’s Bank of China (PBoC) took the first step since 1997 to revalue the renminbi on July 22 last year, it proved to be nothing but a tiny step in the right direction. Brief excitement in the financial markets was quickly followed by the realisation that nothing had really changed at all a currency basket had been introduced; however, its composition was kept secret.The PBoC allowed the renminbi a daily fluctuation,but only of 0.3% against the US dollar and of 1.3% against all other currencies. Surely this loosens the peg per definitionem. However, those praising the winds of change of July 22

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