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Yuan in freefall

Because Yuan is not a free-floating currency,anyone here predicting Yuan will fall or rise is laughable,if other currieces rise Yuan will follow,if other currencies fall Yuan will follow too,PBOC 's mainly target is just to ensure RMB index stable
Well, the contrived situation which @Yingluck was suggesting was that China "keep everything she produce to her own citizens". I merely responded that if China did that, its currency will fall down and much faster than what it is falling right now. wrt USD. Care to tell me how will this not happen or how is this wrong?
 
You still fail to tell me why is this relevant to what I posted.


I don't have enough knowledge to say what world needs. Its a normative argument and usually such arguments are very hard to get right. What "should be" the norm is extremely hard to get correct. What is "fair" and "unfair" is again a very hard to decide question.

Just take a look at history on the rise of west-- not by free trade but by extreme mercantilism, often by back military plunder.
 
Just take a look at history on the rise of west-- not by free trade but by extreme mercantilism, often by back military plunder.
Well the history of 'planned economy' is also not exactly very rosy.

Infact that was one of the insights of Deng Xiaoping. Let farmers grow what they want. You restrict the economy or market too much you mess it up.
 
Well, the contrived situation which @Yingluck was suggesting was that China "keep everything she produce to her own citizens". I merely responded that if China did that, its currency will fall down and much faster than what it is falling right now. Care to tell me how will this not happen or how is this wrong?

Chinese citizen deserve to consume more of her products. Perhaps not all, because China is already over capacity.

To export over capacity, she has the BRI.

Well the history of 'planned economy' is also not exactly very rosy.

With around 20 years under Stalin, Russia went from a broken state to renewed greatness of leading the space race.

But then purely planned economy has its owned negatives.

And neither is free market capitalism perfect.
 
Well, the contrived situation which @Yingluck was suggesting was that China "keep everything she produce to her own citizens". I merely responded that if China did that, its currency will fall down and much faster than what it is falling right now. wrt USD. Care to tell me how will this not happen or how is this wrong?
So you are responding him ?OK ,my bad
 
Well the history of 'planned economy' is also not exactly very rosy.

Infact that was one of the insights of Deng Xiaoping. Let farmers grow what they want. You restrict the economy or market too much you mess it up.

Deng Xiaoping is lucky that Mao did the toughest job.

He cant pull off his feat if he inherit a nation from Chiang Kai Shek.
 
Not always. It hurts China too, when China goes shopping for minerals and petroleum.

Plus, it can only increase trade deficit when other side(s) is ready to soak up production. If Trump again creates trade barriers, it will only hurt China. What you were selling 1 unit for 10$ now fetches only 9.5$ per unit. It only works in your favour if the other party buys more than one unit. If not, your are losing money.

If only Chinese companies are directly selling to the US, which is not majority of the case. For the manufacturer, they are still selling the same product for the same RMB. If they import parts, then yes, cost will rise, which means it serves them better to find local producers instead. As to raw material, it will depend on how much that figures into their operation cost.
 
Actually title

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Indian title? :)
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That's because the US economy is currently going strong. Growth estimates for the second quarter are as high as a 5.3 percent rate. Unemployment is lowest since 2000 and inflation is creeping up, so the Fed is preparing to hike interest rates to prevent the economy from overheating. Many other currencies such as the Indian Rupee have also slumped against the USD.

On the other hand China is reversing its monetary policy to prepare itself for the incoming trade war. Earlier on they have been curbing the property market by forcing banks to reduce loans and clamping down on shadow banking. But it's going to release 700B RMB worth of liquidity into the economy by cutting the RRR on July 5, a day before the scheduled trade war. This will ease up the liquidity issues their companies are facing in the short term.
The property market will probably boom again unintendedly as a result.

财经评论员刘晓博认为,本次降准释放7000亿元基础货币,在当前货币乘数5.4倍左右的情况下,理论上可以衍生出3.78万亿元的广义货币M2,释放出来的资金也是长期资金。这有利于降低市场的利率,对于股市、楼市、实体经济都是利好。

  刘晓博认为,表面上看,“定向降准”主要是针对实体经济,与楼市无关。但实际上,因为楼市回报率高,银行资金总会以各种方式流入楼市,所以此次降准对楼市也是较大利好。

  中国房企债务缠身有目共睹。本次定向降准宏观上有利于缓解房地产行业面临的资金紧张问题。Wind金融数据显示,2018年下半年,中国房地产海外融资债券到期规模在564.75亿元的水平,2019年到期规模增长到1436.95亿元。

  本次降准有不同

  与以往不同,国是直通车注意到,本次央行“定向降准”有其特殊性。中国监管层降准的同时,也在有意识的减少对房地产市场的刺激。

  央行表示,降准后,相关银行要建立台账,逐笔详细记录市场化法治化“债转股”实施情况,按季报送人民银行等相关部门。金融机构使用降准资金支持“债转股”和小微企业融资的情况将纳入人民银行宏观审慎评估。

  以前降准,资金可以直接流向房地产行业,但这次降准表面上明令限制了这一流向。但资金不会绕一圈再进入楼市呢?多位专家认为,还有这种可能。

  易居研究院副院长杨红旭告诉中新社国是直通车记者,基于宏观经济和中美贸易等因素,央行出台的定向降准虽不是针对房地产,但估计会有部分资金绕道进入房地产市场。

  毕竟,与房地产的利润相比,当前实体经济收益少、见效慢,资本还具趋利性。那7000亿会有多少进入楼市?又造成什么影响呢?

  7000亿中的5000亿,央行明确是用于支持市场化法治化“债转股”项目,同时撬动相同规模的社会资金参与。另外2000亿主要用于支持相关银行开拓小微企业市场,发放小微企业贷款,进一步缓解小微企业融资难融资贵问题。

  攸克地产认为,支持企业“债转股”的5000亿,因为要建立台账,逐笔详细记录市场化法治化“债转股”实施情况,流入楼市的资金不会太多,主要是发放小微企业贷款的2000亿想象空间会大一些。

  因为这2000亿是降低邮政储蓄银行、城市商业银行等银行存款准备金释放的资金,很多城商行、农商行所在地,没什么好项目、好企业,很可能出现一些钱进了符合方向的企业或者表面上符合方向的企业,但是企业又以某种方式变换回了银行,成为理财或者银行的各种表外资产,然后流向房地产。

楼市调控再加码?

  央行本次降准,利好房地产市场已成专家共识。专家预计,地方政府调控楼市的压力会因此变大。中国楼市就此是否会迎来新一波强化调控的风潮?

  毕竟,前几轮的楼市调控已经让市场看到,监管层坚持“房子是用来住的、不是用来炒的”的决心。中原地产研究中心统计数据显示,2018年5月中国40余座城市发布调控政策内容多达50次,刷新了中国房产单月调控政策数量记录。今年中国房产调控次数也已多达180次。

  中经联盟秘书长陈云峰预测,1个月内这些钱不会流向房地产,3个月后估计有1/3比例会通过各种渠道进入房地产,应该关注9月30日前后楼市变化。
 
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It's always funny that every time when that F22 yankie is giving himself an orgasm over the "minsky moment" of China he conjures up in his own mind,then bunches of unsolicited members from negligible tiny countries like viet,malaysia,cambodia,thai jump out and bloviate out a screed of useless litany of analysis catering to that yankie,why didn't those oxygen wasting southeastern asians all go extinct?no one bothers to bat an eyelash when that happens for fck's sake
 
The yuan fell for the 11th straight day on Thursday, taking its losses during the period to 4 per cent against the US dollar.

This decline comes after the People’s Bank of China lowered the currency’s daily fixing rate for a seventh consecutive day, a strong signal that the central bank wants to see a weaker yuan as it gears up for a possible all-out trade war with the US.

The offshore yuan traded at a fresh six-month low of 6.6300 per US dollar on Thursday morning, down 0.2 per cent from Wednesday and 3.8 per cent from June 13, just before its 11-day losing streak began.

The currency has tumbled every day since June 14, when the PBOC opted not to follow the US Federal reserve in increasing the interest rate. Its decline has also tracked the escalation in trade tension between the US and China.

The PBOC set the yuan’s midpoint at 6.5960 per dollar on Thursday morning, down 0.6 per cent or 391 points from Wednesday’s 6.5569, which itself was 0.6 per cent lower than Tuesday. The central bank has lowered the midpoint for the last seven days in a row, reducing it by 2.7 per cent. It is now down 3.1 per cent from June 14.

Lukman Otunuga, a research analyst at FXTM, a British foreign-currency trading company, said the PBOC’s tactic of lowering the official fixing of the yuan was an effort to cushion the effects of trade tariffs imposed by the US. Generally, a weaker yuan helps exporters by making their prices more competitive overseas.

“The yuan has weakened to its lowest level this year against the US dollar with prices punching above the 6.6000 level. It is becoming increasingly clear that global trade developments have weighed heavily on the yuan,” Otunuga said. “While the yuan could recover if trade tensions start to ease, any signs of escalating trade war fears are likely to pressure the currency.”

The yuan has never yet been allowed to trade freely. Its price depends on a daily fixing rate set by the PBOC every morning, around which it can only trade in a range of 2 per cent either side. The fixing rate is therefore seen by the market as a signal of the central bank’s strategy.

After PBOC set the fixing lower, the offshore yuan traded in the international market trade at 6.6300 per US dollar on Thursday morning, down 0.2 from previous close. and is now trading a fresh six month lowest. The yuan now traded at a similar level in mid December.

The onshore yuan, traded in Shanghai, also hit a six-month low of 6.6247 against the greenback on Thursday morning, down 0.4 per cent from the previous close.

Stephen Innes, head of trading for Asia-Pacific at forex trading company Oanda, expected the weak yuan would lead the US dollar higher against other emerging-market currencies during the trade war.

“With the US dollar reasserting itself as the unquestionable hedge against an escalating trade war, there's no escaping the wrath of a stronger US dollar,” Innes said.

http://www.scmp.com/business/bankin...-down-4-cent-11-days-central-bank-arms-itself
China and Germany are 2 economies which can get highly effected by the trade war. Emerging mkts as whole is on the verge of greater break down. To see how ugly this currency mkts can get is just take a look at Brazil. In only 6 months govt. 10 year bond jumped to 12-13 from 8%.
Indian RBI is also accumulating massive dollar investment through bond sales to NRI to its warchest.

Time to buy Yuan
Better go for Bitcoin
 
Compared to this day one year ago, Chinese yuan has appreciated against all US$, yen, Euro and pound.

Source: x-rates.com
 

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