YUAN AN APPRECIATION?

Bad pun. But today, China broke it's longstanding currency peg to the US dollar. I've spilled lots of ones and zeros dissecting the arguments surrounding the motivation for, practice of, and contention over China's choice of exchange rate regimes. Now, on their own and on their own timetable China is transforming the domestic institutions which shape its economic engagement with the rest of the world.

The US had previously called for a paltry 10 percent revaluation that paled in comparison to the size of the economic imbalances in question. China gave up today a mere 2.1 percent appreciation in the renminbi. The IMF exhorted China to move to a crawling peg banded +/- 3-5% of the official rate. China offered a 0.3% band.