Goldman’s Jim O’Neill thinks somethings up in Beijing, and that we could see a yuan-rate hike any time soon, because it could actually help China deal with its current economic challenges:
“I have a strong opinion that they’re close to moving the exchange rate,” O’Neill said in a telephone interview from London after China’s central bank told lenders on Feb. 12 to set aside larger reserves. “Something’s brewing. It could happen anytime.”
“They need to do something to slow the economy down and deal with the inflation consequences,” said O’Neill, who forecasts the Chinese economy is currently growing between 12 per cent and 14 per cent and will expand 11.4 per cent over the year. “The more they do — and the sooner — the better.”
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