Economists at Bank of America-Merrill Lynch claim that Chinese yuan seems to be rather close to its fair value and is undervalued only by 3-4%. The specialists note that China’s currency appreciated in real terms since 2005, while the country’s current account surplus has significantly declined.

Merrill Lynch expects that in 2011 Asian currencies will keep advancing, but not very strongly as most of them are now fairly valued. Taking into account increasing inflationary pressure and monetary tightening, the bank advises to decrease investments in Chinese equities and not invest in Hong Kong.

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