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From Forbes: Argentina's black market offers some 10 pesos per dollar, instead of nearly seven at the fixed exchange rate.

So, the open market value of a peso is about 0.10 USD. The official value is 0.15USD.

The official value of 1 peso (0.15USD) is higher than the open market price (0.10USD). Thus the government is overvaluing the peso.

In contrast, 1 CNY is currently worth (0.17USD), i.e. similar to the official value of 1 peso. However, some people argue that it should be worth much more (e.g. 0.25USD).

In your example, exporters are getting screwed through an implicit tax. In my example, exporters are getting an implicit subsidy.



If the exporters are being subsidized, China would have to be depleting its foreign currency reserves for as long as the policy is in place.


China's trade surplus was more than 4 _trillion_ USD in 2013.

Exporters use USD (which they receive from overseas buyers) to buy CNY. Those USD add to China's foreign currency reserves.


No; China is, through it's exporters, getting USD from abroad, not giving it away.




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