An adjustment to China’s currency is probably appropriate if that economy is weaker than Chinese authorities expected, an influential U.S. Federal Reserve policymaker said on Wednesday.
In the U.S. central bank’s first public response to China’s decision on Tuesday to devalue its yuan, New York Fed President William Dudley said: “Obviously if the Chinese economy is weaker than maybe what the Chinese authorities anticipated, it’s probably not inappropriate for the currency to adjust in consequence to that weakness.”
“It’s very early days to judge what’s happening in China in terms of the changes in their currency policy,” he said after a speech in Rochester, New York. “Clearly what was happening is the Chinese yuan was appreciating along with the U.S. dollar.”
