China is labelled by some to be a 'currency manipulator', that is supposedly pegged to the US Dollar. What is the difference between currency manipulation and a fixed regime?
Different motives? I figure that it may be that a textbook fixed regime is undertaken to prevent instability, and is minor (just to correct volatility), whereas manipulation is done with the aim of gaining an unfair advantage.
Different means? I have also read that it could be due to the fact that a manipulator creates domestic base money with which it can buy currency, without sterilisation.
Legality? BVJ below makes an interesting comment about the legality of the two... is there a legal framework in which some forms of fixed currency maintenance are allowed and some not?
Could anyone please clarify? Thanks.