China has been preparing for the fallout of a decision of the Federal Reserve, but find themselves dealing with an unexpected black swan, says financial and political analyst Victor Shih to Bloomberg. The Renminbi might be under pressure.
Victor Shih, a professor at the University of California at San Diego who studies China’s politics and finance:
“The value of China’s foreign-exchange reserves just dropped significantly. If the euro devalues along with the pound, the renminbi will also be under pressure. Brexit also shows that it’s hard to anticipate black swans as China’s technocrats try to do. They had been preparing for a Fed rate hike, but a somewhat different shock hit which may require a different response.”
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