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Page B3 CHINA CURRENCY RISES The Treasury Department said that China has made progress in allowing its currency to rise against the dollar and declined to accuse the nation of manipulating its currency to gain a trade advantage.
In the second, the funding currency rises sharply.
Countries fear losing competitiveness on world markets if their currency rises too much against the greenback; they fear inflation if it falls too far.
When the value of a country's currency rises, its products become more expensive on world markets, and if the appreciation is sustained over time its exports can be hit hard.
The Financial Times this week explained the dilemma there: "As the zloty weakens, the value of Poland's debt denominated in foreign currency rises, putting the government's debt reduction plans into jeopardy".
For all that, if China worries about holding too many dollar-denominated assets, which could depreciate over time as the value of its own currency rises, why does it not quietly sell some of them -- or at least stop buying more?
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Letting the currency rise benefits currency speculators, she said.
Canada, meanwhile, saw its currency rise along with a great commodity boom.
Internal economic pressure may finally force Beijing to let the value of its currency rise.
From 2005 to 2008, the government let the currency rise by about a fifth against the dollar.
If the currency rose too fast, it would slash exports, bankrupt many firms and increase joblessness.
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