A Sneak Peak – What is Yuan Devaluation?
China's Central Bank, devalued its own currency by close to 6%
earlier this week, simply to boost exports in an attempt to recoup from the slowdown
in its domestic economy and recent stock market crash.
The Impact- What It
means for India
The recent devaluation of Chinese currency Yuan, is called to
be a bold move on the part of its Government, considering the fact, that while
it will boost the Chinese exports, this move will eventually harm a large
section of other markets, worldwide. In fact, this came as a blow to the Indian
export market given the situation that the markets have already been going week
in the recent past due to the recessionary conditions in the global arena! Now
the question arises, where is it that it hurt the most? Sadly the answer is not
just singular. This move on China’s part is understood to interfere with
India’s textile industry, chemicals, metals, consumables as well as the
e-commerce sector. Further the depreciation in Yuan’s value may cause Chinese
people to opt local brands over imported ones. India will face substantial
challenges due to this situation because china is a big market for goods such
as cotton copper and chemicals exported from India. If china strategically
keeps reducing the value of its currency in comparison to rupee, Indian markets
might get flooded with cheaper Chinese goods available in the market.
