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Managed Exchange Rate to Prevent Appreciation: The Case of China
A country may manage its exchange rate to prevent the currency from appreciating, often as a strategy to support export-led growth. China provides a prominent example of this policy. Between 1994 and 2005, the Chinese government fixed the renminbi against a U.S. dollar-dominated currency basket. This was done to counteract the natural upward pressure on the currency's value that resulted from China's emergence as a major global exporter. By preventing appreciation, the policy aimed to keep manufactured exports competitive and foster long-term economic growth. Since 2005, the regime has become more flexible but remains carefully managed.
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Economics
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Introduction to Macroeconomics Course
Ch.7 Macroeconomic policy in the global economy - The Economy 2.0 Macroeconomics @ CORE Econ
The Economy 2.0 Macroeconomics @ CORE Econ
CORE Econ
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Learn After
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