Christine Lagarde IMF Chief has asked for a clarification from China regarding its economic policies since currency depreciation and declining stocks has sent global markets plummeting.
While visiting Cameroon Lagarde said that China is beginning to re-balance its growth, and it should make all attempts to regulate its activity at a more sustainable level.
She added that there was a need to regulate those policies, particularly in the matter of the exchange rate policy, as its effects were being felt worldwide.
Only this week, the yuan had been devalued by the central bank of China, with the result that its value fell by 1.4 percent, the lowest ever since 2011 – with only a slight reversal two days ago.
Many economists had predicted that it was only to be expected that the Chinese central bank would devalue the yuan after several other countries has devalued their own currencies recently. Despite this, this move sparked worries that the government would not be able to handle the slowdown in the growth of the Chinese economy. As a result of this, many analysts suggest that China needs to be more open and transparent about its economic policies, given that any fluctuation in the Chinese economy has the ability to affect the economies of the rest of the world.