China shocked the world today by suddenly devaluing their currency. What does this mean for those purchasing 3D printers?
Let’s look at what the People’s Bank of China has done: They’ve adjusted the official exchange rate between the Chinese Yuan and the US Dollar by 1.9%. This means you can buy 1.9% more Yuans per dollar.
China has pegged their currency at a fixed rate against the US dollar, rather than having it float as many other currencies do. But according to a report on CNN:
The PBOC typically sets a daily midpoint for the yuan, around which the currency is allowed to trade within a 2% band. Until now, the central bank had total control over where the midpoint was set. Going forward, the midpoint will be based on the previous day’s closing price.
This suggests that the currency may drift towards devaluation a bit more.
How does this affect 3D printing? Since many 3D printers and underlying components are manufactured in China, it may mean that the prices could become lower. Initially, this could be 1.9% lower, although it depends entirely on whether the Chinese suppliers continue to maintain their product prices in US Dollars. If that’s the case, then the supplier receives 1.9% more Yuans, instead of the buyer receiving a 1.9% saving. Or it could be something in-between. Competition between suppliers may ultimately cause the pricing to droop for buyers as a result of the devaluation.
Another factor to consider is that if you're not using the US Dollar, your own currency may fluctuate as a result of China's move. You may find yourself paying more for 3D printers even if the Yuan is devalued!
Nevertheless, there will no doubt be a very slight downward trend in pricing over time, as this change flushes its way through the supply chains. On a USD$1,000 unit, you’d think you’d see very minor price changes of about USD$19, but really that’s so small it would be overwhelmed by discounts, sales and competitive effects anyway. The ultimate retail price of a machine is a combination of many complicated factors, only one of which is the exchange rate. If the Yuan’s value were to drop further, we may eventually see “real” effects on 3D printer pricing.