Google the web site for Pacific Exchange Rate Service. Click on "Plot Interface". Select as the "Base Currency" the Chinese Renminbi (the unit of which is the Yuan), and for the "Target Currency" the U.S. Dollar. Under "Choose Time Horizon" select "Exact Time Period", then 1 Feb 2005 for the "Start Date" and 21 Jan 2009 for the "End Date". Press "Make Chart".

Part one: What exchange rate regime do you think the Bank of China followed until July, 2005? Justify your opinion. You might find it useful to look at the Renminbi/USD exchange rates for a year or two before July, 2005 and compare that to the exchange rates for the USD against other currencies for a year or two prior to July, 2005.

Part two: What regime do you believe the Bank of China was following from July, 2005 to July, 2008?Justify your opinion.

Part three: What regime do you think the Bank of China has been following since July, 2008? Justify your opinion. Once again, you might find it useful to look at the exchange rates between the USD and other currencies since July, 2008 to back up your opinion.

Answer rating: 100% (QA)

Part one Before July 2005 China maintained a fixed exchange rate regime where the value of the Renmi... View the full answer