Global Currency War

Each Country has its own stretegy for its Currency . Having said that each Countries through its Central Bank is guiding and formulating rules & regulation to guide its currency . Due to Globalisation the Trade of Goods & Services has gone beyond national Boundry . Some Countries are very strict some are liberal and rest are adopting the middle path. Liberal refers that they allow free flow of Capital to their Country and allow Capital to go out freely . Such a rule will have a significant impact on the exchange rate of the currency . All Countries can not dare to adopt this . Some other Counties are very strict in allowing Capital Inflow & outflow due to the obvoius reason to avoid wide swing in the exchange rate . Some protect their currency to protect their Exporters ( like China ) . Some protecting their currency as others use that currency for speculative purpose . ( Like Swithzerland did in the recent past ) . China want to protects its Exporter and due to that they have never allowed Yuan to trade freely . It is called a pack currency as it is controlled by the Government . USA is continuiosly raising this in international forum but till now they have failed to make any impact . USA wants Yuan should be made a free currency and its exchange rate should be decided by market forces . Even they came out with a legislation but it has no visible impact . So far a number of countries have been acting on their own to keep their currencies from rising too much against the dollar -- Japan, Switzerland, South Korea, Taiwan and Brazil, among others. In short, the competitive undervaluation of China is infecting the entire global economy.What the world's central bankers should do is join together and coordinate their efforts at currency management, and get tough with China. But no one wants to irritate China, because they are a big investor in everyone's government bonds. They're also everyone's biggest customer, for iron ore, corn, soybeans, steel, you name it. Besides.

China will not have anyone telling them what to do.