GS says the decline in the RMB index will offset the drag on growth from US tariffs
Bloomberg with more:
- By helping China's export competitiveness … should boost ... gross domestic product by 40 to 50 basis points, which is enough to blunt the impact of U.S. levies on $250 billion of Chinese goods
- "Yuan depreciation is a relatively effective tool to cushion downward pressures on growth,"
10 percent drop in the yuan against the basket may boost export growth by about 6 basis points after a lag, adding around 80 basis points to GDP … Headline Consumer Price Index inflation would only increase by 20 to 30 basis points - "The notion that exchange rate depreciation can boost growth significantly without causing a large increase in inflation represents a favorable trade-off, given that the risk of high prices constraining policy easing is more important than the risk of overly low inflation"
