yuan pegged to dollar advice please

[Perrington]

Could someone give a brief description of why or how the yuan or any other currency can "peg" itself to the dollar ? And what do they hope to achieve / obtain by this pegging.

Thanks in advance.

 

[TWI]

Here is an article from this weeks economist. It may answer your question
http://www.economist.com/agenda/displayStory.cfm?story_id=3345465

 

[Perrington]

Every little bit helps. Cheers.

 

[TWI]

http://www.atimes.com/atimes/China/FJ23Ad06.html

 

[Perrington]

My first question was along the lines of, "why would a nation want US monetary policy influence their own currency" Maybe I have been a little naive here. It would appear developing nations initially find a peg to their benefit as it provide's a solid platform for external investment. However in the long run, when these economies get on their own 2 feet, monetary policy really ought to be autonomous from within. Yuan being a perfect example.

Thanks for the tips.

 

[Perrington]

Follies of fiddling with the yuan

Excellent