Deutsche Bank’s Liu Sees Exchange Rates, U.S. Dollar Becoming More Volatile

The video discusses the implications of US and China currency interventions, highlighting China's increasing exchange rate flexibility and the impact of geopolitical uncertainties like Brexit and the US-China trade war. It explores China's fiscal and monetary strategies to maintain economic stability, including fiscal deficits and monetary easing. The video also addresses challenges in China's credit market, such as defaults and liquidity issues, and the PBOC's efforts to stabilize the market. Finally, it clarifies recent PBOC currency fixes.

What is a potential consequence of US intervention in currency markets?

• Increased stability in exchange rates

• Decreased volatility in the dollar index

• Escalation of the US-China trade dispute

• Strengthening of the Chinese renminbi

Which institution is considered more important for the Chinese currency's stability?

• The People's Bank of China

• The European Central Bank

• The Federal Reserve

• The World Bank

What fiscal measure has China implemented to support economic growth?

• Maintaining fiscal deficit at 3.5% of GDP

• Increasing fiscal deficit to 2.8% of GDP

• Reducing fiscal deficit to 1% of GDP

• Eliminating fiscal deficit

What has been a significant factor in the credit squeeze in China?

• Defaults in the credit market

• Increase in foreign investments

• Strengthening of the renminbi

• Rise in export growth

How is the PBOC addressing the credit squeeze in China?

• By strengthening the renminbi

• By providing liquidity to small and medium-sized banks

• By reducing fiscal deficit

• By increasing interest rates