Ray Dalio, founder of the world’s largest hedge fund Bridgewater Capital, praised China’s latest currency move in a Linked In post this morning:
“China’s policy makers’ decision to squeeze the shorts in its currency is, in my opinion, a smart move because it
- a) demonstrates the Chinese government’s power,
- b) discourages those who would lose confidence in its currency (in turn lessening the desire to sell the yuan), which helps stabilize the balance of payments and currency, and
- c) produces a tightening that works well in conjunction with tighter monetary policies to tighten credit (which is appropriate now).”