In reality, this decision was expected, since the fall of 2013, the Governor of the Central Bank warned of the upcoming expansion of the trading band of the Yuan. It is true that the sudden depreciation of the early days, especially against the dollar, was fairly quickly resolved. If the depreciation that proves the strongest since 1994, it remains in proportions not only measured but controlled by the Central Bank. Thus, beyond the announcement effect, the markets do not seem to feed strong concern about the evolution of the Yuan and even less about the health of the Chinese economy.
Especially since this return to flexibility of the Yuan down as well as up, is precisely to further solidify the foundation of the Chinese economy. China has embarked on a process of re balancing of growth towards domestic demand as well as a consolidation of public finances. According to him, any measures to boost the economy also helps to reassure people whose financial and social demands are constantly increasing. It is also the objective of a sound and sustainable growth which explains the choice of the Chinese Government to allow a large company to go bankrupt very heavily subsidized renewable energy sector. The company Chaori could therefore meet its debts to its investors. It will clean up some of its financial system, subject to excess debt and opaque practices.
The Chinese government has chosen not to support non-viable enterprises, let alone those who receive large subsidies, in order not to increase the burden of its banks and impose market logic. Until then, the belief that the state would not let such events happen has led to excess in the amount and nature of funding. The latter had to make a choice between business support and support for local communities, also very involved in the shadow banking. Cannot decently leave recent bankruptcy, the Government has favored the establishment of a strict control with the creation of a Court of Auditors Chinese to limit debt and achieve sustainable deflation of this bubble harmful healthy growth.
This is however not the case of the Russian currency, battered since the beginning of the Ukrainian crisis. If the volumes traded in rubles remain incomparably lower than those on the Yuan, the fact is that political tensions between Ukraine and Russia had the effect of attracting new investors, including individuals. He was so good omen to play down a currency bearing the brunt of foreign policy of President Putin. Despite the intervention of the Central Bank of Russia on the changes announced on March 3 despite taking opposite positions past , the depreciation of the Ruble continued until mid- March Rubles against the Euro.
Recall that the currency had already experienced a wave of mistrust in January, as many is emerging market currencies. Since the only vain and the Russian Central Bank intervention the ruble is evolving freely. But not necessarily down. The evolution of the situation in Crimea, who voted in a referendum for unification with Russia, indeed helps to stabilize the ruble since the weekend of March 14. The Yuan and the Ruble does not seem more or engaged in a clear trend but subject to strong price fluctuations under the influence of many political and economic events. Rigorous monitoring of current is necessary for investors who want to try their luck.
