Impact of RMB Revaluation on Taiwanese ICT Industry Deemed Mild
July 22, 2005
Yielding to ever-louder foreign rumblings, particularly from the US, and to address mounting internal imbalances, China has announced it will allow a 2.1% revaluation of the renminbi. Starting July 22, the renminbi will be allowed to fluctuate by 0.3% against the dollar in daily trading, while moving in a band of 1.5% above or below its new central level of 8.11. Although the alteration will inevitably eat into foreign investors' profits and increase the cost to set up factories in China, the impact is expected to be mild for the Taiwanese ICT industry. The general consensus of Taiwanese ICT players is that as long as the revaluation stays under 5%, there would be no great changes in investment strategy.