Above the fracas

11 Dec 2014 By Andy Mukherjee

The yuan has held relatively steady against the dollar this year, even as the yen and the euro have tumbled. A weaker exchange rate could help boost Chinese exports and inflation. But companies’ large foreign-currency debts make competitive devaluation an unattractive option.

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The yuan rose 0.2 percent against the U.S. dollar on Dec. 10, after sliding 0.5 percent over the previous two days.

The Chinese currency has weakened 2 percent against the U.S. dollar this year, compared with an 11 percent slide in the Japanese yen, a 9 percent drop in the euro and a 5 percent decline in the South Korean won.

China’s inflation rate hit a five-year low of 1.4 percent in November. Producer prices fell for a 33rd straight month, data released Dec. 10 showed.

Chinese exports grew 4.7 percent from a year earlier in November, the slowest pace since April.

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