InvestorQ : Would it really matter to Indian markets if China devalued the Yuan?
Ria Jain made post

Would it really matter to Indian markets if China devalued the Yuan?

Answer
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Rashi Mehra answered.
2 years ago


In the last 20 years, world markets have become interestingly connected through trade, commerce, capital market flows and monetary policy. The surprise devaluation of the Chinese Yuan by 2% towards the end of 2015 created nervousness among the global markets. Not surprisingly, Indian markets too responded with nervousness on Tuesday as the INR weakened below the psychological Rs.64/$ mark and the equity markets lost 3/4th of a percent. To be fair, China did not actually devalue the currency. It only made its benchmark methodology more market-driven and changed the mid-point, which had the effect of a 2% devaluation of the Yuan.