CNY (RMB) 02 (Feb 16 - Dec 24)

[winston]

China’s yuan vs renminbi: what’s the difference?

The yuan is technically the unit of account of the renminbi, the official name of the currency, but yuan is also used to referred to the Chinese currency

Despite Beijing’s best efforts, the currency still has a long way to go before it can challenge the US dollar because of rigid capital controls

Source: SCMP

https://www.scmp.com/economy/china-econ ... difference

[behappyalways]

China wants to weaponize its currency. A digital version could help
https://edition.cnn.com/2020/12/04/econ ... index.html

[behappyalways]

Relentless China Inflows Spur Call for Strongest Yuan Since 1993
https://www.bloomberg.com/news/articles ... emium-asia

[winston]

Economist predicts yuan at 6 per US dollar by end 2021

Continuing flows into China’s bonds and stocks has one yuan bull predicting the currency could strengthen to a level not seen in nearly three decades.

A “flood” of foreign cash will chase yuan-denominated assets in 2021 because they will offer far better yield than the rest of the world, according to Liu Li-gang, chief China economist at Citigroup Inc, Bloomberg reports.

He predicts the currency could rally by 10 percent to 6 per US dollar – or even more – by the end of next year. The yuan hasn’t been that strong since late 1993, just before China’s unification of official and market exchange rates triggered a plunge in the currency.

The yuan has gained since late May, rising to a more than two-year high.

Overseas funds have increased their holdings of onshore bonds and stocks by more than 30 percent this year to records, official data showed, prompted by index inclusions and the country’s wide interest-rate premium over other markets.

To slow the advance, Beijing has made it cheaper for traders to bet against the yuan and has relaxed capital curbs to allow more outflows. But those measures have done little to dampen optimism.

That puts the People’s Bank of China in a policy quandary. It needs to narrow the yuan’s yield premium over the rest of the world to slow the appreciation, as too strong a currency could undermine its push to support an economic rebound that’s reliant on global demand for Chinese exports.

Meanwhile, it wants to keep interest rates elevated, as Beijing’s earlier stimulus helped fuel a rapid buildup in leverage, sending an indicator for the country’s debt levels to a record high.

“The problem China faces next year will be huge, unrelenting capital inflow,” Citi’s Liu said. “The yuan’s appreciation will be a key threat to China’s macro economy.”

The Chinese currency has strengthened by nearly 10 percent from this year’s low in late May, making it the second best performer in Asia following the South Korean won.

The yuan advanced in both onshore and offshore markets Monday.

A rapid advance in the yuan could impair Chinese exports by making them more expensive. That will in turn hurt China’s growth, because outbound shipments have emerged as a key driver for the economy on global demand for its pandemic-related goods.

Also, sustained appreciation in the currency could attract speculative money inflows, fueling local asset bubbles and creating financial risks.

The PBOC may further relax restrictions for funds to leave China and guide the exchange rate weaker with its daily reference rates, he said, adding the yuan could end 2021 at 6.35.

The last time the yuan got close to 6 was in January 2014, when the currency was bolstered by hot money inflows. The central bank managed to reverse the course of the rally by sharply weakening its fixing rate for two consecutive days.

“We still like the Chinese currency against the dollar, but we do recognize that the pace of appreciation will be slower,” said Stephen Chang, a portfolio manager at Pacific Investment Management Co. in Hong Kong. “We think it’s worth being overweight in China government bonds.”

Source: The Standard

https://www.thestandard.com.hk/breaking ... y-end-2021

[winston]

People’s Bank of China official suggests firmer yuan to offset rising commodity prices

China should let the yuan appreciate to offset the rising cost of commodity imports, a People’s Bank of China official said, Bloomberg reports.

His comments came as China grapples with the fastest rise in producer prices in more than three years. The government rolled out more measures this week to check speculation in the commodity markets and quell inflation fears.

The rally in global commodity prices this year was mainly caused by the expansion in demand as global economies, including China, recovered, Lyu said.

Ultra-loose monetary policy followed by major central banks, other than the PBOC, also contributed, he said.

Lyu, who expects the year-on-year growth in producer prices to likely stabilize or even moderate in the second half of this year, favored maintaining a steady monetary policy.

He also called for studying how to improve compilation of consumer price index to better reflect inflation levels.

A new gauge that tracks asset prices can be developed and tested, as it’s necessary to take them into consideration when measuring inflation, he said.

Source: The Standard

https://www.thestandard.com.hk/breaking ... ity-prices

[winston]

Yuan's rapid rise is 'not sustainable'

"We will prevent short-term money flooding from pushing up the yuan and diminishing the competitiveness of export firms

Prices of key commodities including steel products and copper had surged more than 30 percent since the start of the year, denting corporate profits throughout the supply chain.

The PBOC-backed Financial News also warned yesterday of the potential factors that would lead to a depreciation of the yuan against the dollar, including policy changes by the US Federal Reserve, a strong revival of the US economy, control of the Covid-19 pandemic and bursting of US asset bubbles.

Source: Reuters

https://www.thestandard.com.hk/section- ... stainable'

[behappyalways]

Currency Wars Return: China Hikes FX Reserve Ratio For First Time In 14 Years In Bid To Weaken Yuan
https://www.zerohedge.com/markets/curre ... eaken-yuan

[behappyalways]

21.06.01【豐富│東南西北龍鳳配】Pt.2 人民幣怎麼可能不升值
https://m.youtube.com/watch?v=BrdqvXyEveI

[winston]

US dollar-yuan exchange rate: China ups forex deposit reserve requirement ratio in bid to curb currency rally

The People’s Bank of China (PBOC) will raise the reserve requirement ratio for banks from 7 per cent to 9 per cent effective from Wednesday next week

The offshore yuan weakened following the announcement, dropping by as many as 200 basis points to 6.3680 against the US dollar

by Amanda Lee, Orange Wang and Ji Siqi

Source: SCMP

https://www.scmp.com/economy/china-econ ... it-reserve

[behappyalways]

China Fixes Yuan At Weakest On Record Relative To Expectations
https://www.zerohedge.com/markets/china ... pectations