China devalues – what it means

The New York Times reports that China "on Tuesday sharply devalued the country’s currency, the renminbi, a move that could raise geopolitical tensions and weigh on growth elsewhere."  Why?  What's the big deal about changing the value of a currency by two percent?  Three reasons: 1. The value of the renminbi relative to the dollar is part of what determines the price of Chinese imports in the … [Read more...]