China 'fully prepared' for currency war
China's central bank deputy governor Yi Gang said: “China is prepared. In terms of both monetary policies and other mechanisms, China will take into full account the quantitative easing policies implemented by central banks of foreign countries.” However, Mr Yi said a currency war can be avoided if policymakers follow the consensus reached at the Group of 20 nations meeting in Moscow last month. ■ A currency war occurs when a number of major economies compete against each other to devalue their own currency and lower the exchange rate. This cuts the price of exports from the country and makes imports more expensive – effectively boosting jobs as demand from both domestic and foreign markets increases.