Fall in Chinese Yuan: A Concern for India

dynamitenews.com
New Delhi/ 08 Jan. The slide in China’s yuan has become a matter for concern for India. A day after China allowed the biggest fall in the yuan in five months, the government said it was discussing possible measures to deal with a likely surge in imports from its northern neighbor. 

A worrying development
Union Minister for Commerce & Industry Nirmala Sitharaman says, ‘ yuan’s fall would worsen India’s trade deficit with China.’ She added that though the government would not rush into any action, but it is mulling over steps to counter an expected flood of cheap steel imports with domestic producers. 

Biggest fall in the yuan in 5 months
A day ago China allowed the biggest fall in the yuan in five months, pressuring regional currencies and sending jerks to global stock markets as investors feared it would trigger competitive devaluations. Indian steel companies have asked the government to set a minimum import price to stop cheap imports undercutting them. A similar measure was adopted in 1999. 

China’s national bank intervenes
Meanwhile, People’s Bank of China intervened on Friday and boosted the yuan. It strengthened yuan’s official rate for the first time in nine trading days.