The International Monetary Fund has given the yuan a historic vote of confidence when it included the Chinese currency in its elite club of major currencies. The yuan, also known as the renminbi, is widely expected to be added to the IMF’s group of international reserve currencies after an IMF meeting held by its managing director Christine Lagarde. It comes after lengthy efforts by Chinese officials to legitimise the yuan, which critics say has been kept artificially cheap to artificially boost exports in the world’s second-largest economy. China has lobbied hard for the currency to be included in the list, which at present is made up of just the dollar, the euro, the pound and the Japanese yen. The list has not been altered since 2000, when the euro replace the franc and deutschmark. While being a part of the club carries no particular conditions, and is largely symbolic, the yuan will contribute to the value of the special drawing right – a weighted average of the currencies – which the IMF uses to price its emergency loans...More significant is the diplomatic legitimacy that inclusion will grant the yuan, whose value is carefully managed by Chinese authorities. Officials devalued it over the summer in a shock move to respond to slowing growth, but it is still seen as tightly controlled with the country’s central bank lacking transparency. Being included in the IMF basket will draw additional scrutiny and see officials encouraged to open up the currency at the same time that China faces economic slowdown, which could put the brakes on reform. Although the decision is expected to be announced today, the yuan will not officially become a reserve currency until September 2016.
Access Investments-Building Awareness - European Union-ROMANIA
Sunday, December 6, 2015
The International Monetary Fund has given the yuan a historic vote of confidence when it included the Chinese currency in its elite club of major currencies. The yuan, also known as the renminbi, is widely expected to be added to the IMF’s group of international reserve currencies after an IMF meeting held by its managing director Christine Lagarde. It comes after lengthy efforts by Chinese officials to legitimise the yuan, which critics say has been kept artificially cheap to artificially boost exports in the world’s second-largest economy. China has lobbied hard for the currency to be included in the list, which at present is made up of just the dollar, the euro, the pound and the Japanese yen. The list has not been altered since 2000, when the euro replace the franc and deutschmark. While being a part of the club carries no particular conditions, and is largely symbolic, the yuan will contribute to the value of the special drawing right – a weighted average of the currencies – which the IMF uses to price its emergency loans...More significant is the diplomatic legitimacy that inclusion will grant the yuan, whose value is carefully managed by Chinese authorities. Officials devalued it over the summer in a shock move to respond to slowing growth, but it is still seen as tightly controlled with the country’s central bank lacking transparency. Being included in the IMF basket will draw additional scrutiny and see officials encouraged to open up the currency at the same time that China faces economic slowdown, which could put the brakes on reform. Although the decision is expected to be announced today, the yuan will not officially become a reserve currency until September 2016.
Subscribe to:
Post Comments (Atom)
2 comments:
Stock markets do not exist in their own right; they are supposed to represent the value of the underlying companies and the state of the economy.
Companies provide real products and services into that economy.
Companies take raw materials and make them into products.
Cheap oil = collapsing global economy
Low commidity prices = lack of demand for raw materials from which real things are
made
QE and low interest rates may have kept stock markets up, but the real economy is collapsing.
Maintaining the penthouse suite while the foundations are crumbling.
Central Banks policies just aren’t working.
When the foundations eventually give way, the penthouse suite comes down too.
ISNT IT IRONIQUE
THIS IS THE INFORMATION THEORY
ONE BAD AND TEN NICE NEWS AND THEN THE BAD IS EQUALLY IMPORTANT
WE LOOK FOR THE DIFFERENT OPINION
THE GHOST OF THE CRISIS IN USA AND EUROPE AS ALL AROUND THE WORLD
BIG COMPANIES LAYOFFS , PRODUCER PRICES, INVENTORIES, INDUSTRIAL OUTPUT, CHINA EXPORT TO SOME MARKET
IT IS COMING FROM EUROPE - THEIR BANKS AND GOVERNMENT DEBT
ALSO USA GOVERNMENT DEBT
FOR THE PREVIOUS CRISIS THERE WAS GOOD COOPERATION WITH OR WITHOUT INTENTION AMONG THE COMPANIES 2009, THIS TIME THE BUYBACK WAS PROBABLY NOT SUCCESSFUL FOR THE COMPANIES AS THE SHARES DECLINED EARLY AND SMOOTHLY.
WERE I A CENTRAL BANKER I WOULD HAVE BEEN VERY PROUD OF THIS SOFT LENDING THIS TIME. CHEERS FOR CHRISTMAS FOR THIS FROM ME.
BUT THAT WAS THE EASY PART NOW THERE IS DIFFICULT TO BE TAKEN MORE GOVERNMENT DEBT AND HE NEW CRISIS IS EXPECTED TO LAST MORE THEN 10 YEARS,
IT IS NO NICE THAT THE IMPUDENT PUBLIC IS NOT VERY THANKFUL FOR THE GOOD JOB AND TOOK SOME MONEY SELLING AT HIGH PRICES IN THE BUYBACK. THEY LOOK FOR THE TERM CIVIL WAR IN GOOGLE.
NOT GOOD EQUILIBRIUM FOR THE PUBLIC.
I DO NOT BELIEVE THAT THE TERM CIVIL WAR IS RELATED TO ISLAMIC COUNTRY AS WELL.
THE UNPLEASANT DESTINY TO LIVE IN INTERESTING TIMES.
EUROPE WENT TO REDUCE THE EXCHANGE RATE BUT NOW THE PUBLIC SEE THEIR LOANS IN USD FOR EXAMPLE AS HIGH SO THERE WILL BE DEFAULTS TO SUCH BANKS IN IN QE EUROPEAN COMPANIES AND GOVERNMENTS HAVE BORROWED A LOT?
SO SHOULD THE DISCOUNTED FUTURE PROFITS AND SHARE PRICES INCREASE IF QE 2 IN EUROPE IS A MISTAKE. QE GOES TO JARS AND ABROAD NO M2. THEN IF GDP CONTINUE TO DECLINE AND IS SUPPOSED TO BE FINANCED BY FINANCED BUDGET WITH NEW MONEY DISRUPTIVE INFLATION MAY COME.
Post a Comment