Quotes from PIMCO:
-As the world's largest consumer of commodities, China is clearly a net beneficiary from the sharp falls in the price of oil and iron ore, and this positive terms-of-trade shock will lower inflation and boost national income. Conversely, policymakers have fixed the yuan strongly versus the U.S. dollar and largely refrained from currency intervention.
-As a result, the yuan is appreciating strongly in real effective terms, and this is somewhat offsetting the positive terms-of-trade shock in addition to restricting the competitiveness of Chinese exports.
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