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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: tekgk who wrote (473)	1/5/1998 1:17:00 PM
From: RealMuLan	Respond to of 9980

I think the value was set somewhat by the underground market, which is a free market. 1:9 (US$ vs. Yuan) was about an all-time high underground market rate. And then it came down somewhat and official rate went up somewhat, they met at somewhere around 1:8.3. This rate was there ever since 1994. I remembered in 1991 Yuan was strong, and even the underground market rate was only 1:5.85. I don't remember what was the official rate in 1991, maybe around 1:5, or maybe lower than that. And when I went back to visit in 1993 summer, the underground market was already became 1:8.6, and the semi-offical rate was 1:8. By semi- rate, I meant as long as you had a Chinese passport, you could went to the China Bank to exchange US$ for Yuan at that rate (higher than official rate but a little bit lower than underground market rate). And at that time the official rate was something like 1:5.5. So I guess you can call that period as a "transition" period. And then after China offically devalued its currency in 1994, the underground market became insignificant. Ordinary Chinese do not need US$. It is really not much demand there.