Investors take risks in rushing to purchase foreign currencies

WITH THE EXCHANGE RATE OF the renminbi to US dollar fluctuating, many Chinese residents are keen to purchase US dollars as an investment. Investors need to get used to the market and act rationally, says a comment in People's Daily:

As the renminbi has been rising against the US dollar for more than a decade, people have long been accustomed to a strong domestic currency. Thus a fall in the renminbi's exchange rate to the US dollar will almost certainly result in shocks to the market, especially as the US Federal Reserve has raised interest rates for the first time in almost 10 years.

However, it is rather irrational to purchase US dollars because of a small change in the short term. In an increasingly more marketized economy, exchange rate fluctuations are normal and investors need to get used to that. That applies to all currencies during their processes of going global.