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.