This week I had a chance to interview Richard Olsen, co-founder of OANDA, founder of Olsen Ltd and Olsen Financial Technologies. Richard is now focusing on high-frequency trading, financial software and research. I wanted to focus my interview with Richard on the recent developments in China – mainly the creation of an offshore market for Yuan (renminbi) trading.
Q. Do you think the government should allow the currency to appreciate in order to alleviate inflation?
A. Yes, they should, but there are major risks. The medium-term appreciation, I believe, is not going to be 4-5% but rather more than 100%. Because of the huge upside, it is big step to introduce fee floating that can have serious economic and political consequences. This process should happen naturally and be gradual, not in a day.
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Rest of the interview can be found on Forex Alliance.