Rising Yuan as the Reserved Currency
Rising Yuan as the Reserved Currency - following 8 steps - allowing Chinese citizen to carry cash up to 8000 Yuan to go abroad wiuthotu paying cash exportation tax ...
Deposit accounts in Yuan denomination in Hongkong Special Administration Region hasreach 2 Trillion Yuan alogn with 70 billion Yuan in bonds
SWAP currentcy in Yuan also can be done in South Korea, Hong Kong, Malaysia, Indonesia, Russia, and Argentina - Now, it is Thailand to allow such a SWAP ...
Furthermore, Yuan for EXIM and cross border services can be done in 10 countires including North and South Korea, Hong Kong, Malaysia, Indonesia, Russia, and Argentina Burma, Laos, Vietnam
It is just a matter of tiem when Chiense Yuan could become serious rival to the almighty US Dollars - lewt's see if it sogin to happen by the end of 2014
Bank of Thailand (BOT) has been allowed by People's Bank of China (中国人民银行/中國人民銀行) to invest 300 Million US Dollars on Yuan Denomination Bonds which has been approved a week ago.
Furthermore, People's Bank of China (中国人民银行/中國人民銀行) has allowed BOT to invest on FOREX in from of stock, equity, interbank loans, assets/bonds tradings up to 1,000 million Baht but BOT regulation ALLOWS BOT to invest ONLY at assets/bonds ...
The permission to allow BOT to purchase bonds in Yuan denomination is the first step to put Yuan into foreign currency reserves at part with US Dollar, Japanese Yen and Euro.
The reserves on 9 March 2012 (reported on 16 March 2012) held by BOT is 179.1 Billion Dollars - down from the previous week by 0.9 billion Dollar ... while l the Forward FOREX trading is 29 billion Dollars - with the total asset of 208.1 billion Dollars
Loan for the government: 115.8 billion Baht
Loan for the financial liquidity: 3982.5 billion Baht
the current status of cash in the market is 1,289.3 billion Baht
BOT making a clear point to invest 2.3 Billion US Dollars in Yuan - 1.3 Billion Dollar to purchase assets/bonds in Yuan Denomination in Mainland China Money markets and 1.0 Billion Dollars to purchase assets/bonds in Yuan Denomination in Hongkong Money markets.
However, BOT considers Yuan Denomination assets NOT as a part of foreign currency reserves according to the criteria by IMF even though the rising Yuan will soon to become a part of foreign currency reserves as it has shown stability.
Last edited by Wisarut; 11-11-13 at 01:21 AM.
It is just a matter of time when Yuan will be at the same status as US Dollars, Japanese Yen and EU Euro but Chinese government never expect Yuan to replace US Dollars at all - So far, China getting FDI at at 110 billion Yuan while accumulated FDI from 1978 to 2011 is now 1.22 Trillion Dollars while Chinese investors have invested oversea at 437 billion Dollars
Direct exchange between Yen and Yuan to facilitate the trade between Japan and China will become effective on 1 June 2012 - eliminate the need for US Dollars for the trade between two nations and it is the first time for Mainland China to put foreign currency other than US Dollars in their reserves - after the permission from Chinese government to allow Japan to purchase 65 billion Yuan of Bonds in 1 March 2012
Now Chinese government is waiting for Euro to be tumbled further which will drag GB Pound and US dollar into even worse trouble before floating Yuan into the market - effectively turning Yuan to have the same status as US Dollars and become the new currency reserves...
No wonder, Uncle Sam is now making a contract with Yinglux to allow US jets to station at U-Tapao Airport as well as other weapon movements in that Airport - ready to deal with Mainland China during the Spatley Dispute - This kind of contract is due to the lobbying by Ai Maew to Yinglux or so ...
Direct trading of Yen and Yuan in Tokyo and Shanghai will help Japanese firm at the long run since it will cause Yen depreciation to allow more exports from Japan to China market .. it is also reducing the Forex transaction cost by 3 Billion Dollars a year ...
However, People's Bank of China (中国人民银行/中國人民銀行) will have to confront with the new problem on controlling Yuan that gone offshore ... If People's Bank of China decides to allow the limited floating exchange rate system, Yuan will go appreciated while Yen, US Dollars and Euro will be depreciated
Push for trade in yuan increasing
by Don Weinland.
Phnom Penn Post
Wednesday, 25 July 2012
Slowly but steadily, demand to do cross-border business in Chinese yuan is pushing its way into one of Asia’s dollar-dominated strongholds.
As China continues to liberalise the yuan – or at least hint at when some capital controls could be lifted – Cambodian businesses that import from China have seen increased interest from their Chinese counterparts to settle in the yuan.
“Suppliers in China are asking to settle in yuan, but they’re not insisting yet,” said Tom Kimson, chief executive at Dynamic Scientific Co Ltd, a Cambodian company that supplies pharmaceuticals and laboratory equipment. The company gets its agro-chemical products from China.
“In reality, you can’t get away from this when doing business in the region.”
The pace at which the yuan has taken a spot in international trade has been “surprising”, according to ANZ’s head of greater China economic research, Li-Gang Liu.
ANZ Royal launched a yuan remittance service this month, and a handful of other Cambodian banks have either put similar products on the market this year, or say they will launch the invoicing option soon, he said.
The yuan – also called the renminbi, abbreviated RMB – accounted for 4 per cent of transaction value in international trade as of April, according to Li-Gang Liu, who spoke yesterday at a forum on offshore yuan trading and remittance in Phnom Penh.
The currency is still far behind the US dollar and the euro, which represent 84 per cent and 7 per cent of global transactions respectively. But the speed at which the yuan has moved from a strictly domestic currency in China in 2010 to an invoicing currency in the region has taken economists by surprise.
“Given developments in the European Union, it’s believed that the RMB will be the No 2 [transaction currency] in the not-so-distant future,” Li-Gang Liu said.
The implications for Cambodia are not concrete, but economists and insiders agreed that the yuan would replace the dollar in cross-border trade between China and Cambodia.
“Recent reports showed that we are continuing to lose money on the exchange rate,” Louis Xiang, general manager for ZTE Southeast Asia, said yesterday, adding that the Chinese technology firm did almost all of its business in dollars.
“In the future, our company will try to do business in yuan ... Policy encourages this, and we can avoid losing on exchange [fluctuations].” The Chinese government has given tax incentives to companies that settle accounts in yuan.
In late March, China and Cambodia pledged to double bilateral trade to US$5 billion by 2017. The jump in trade, however, would largely be Chinese imports, experts told the Post earlier this year.
“That deficit would have to be funded by the banking sector” if banks were to invoice two-way trade between the countries, Grant Knuckey, ANZ Royal chief executive, said yesterday.
During the past year, several banks in Cambodia have come forward with plans to market yuan remittance and invoicing products, among them ANZ Royal, Cambodia Public Bank, Maruhan Japan Bank and Union Commercial Bank.
A fully convertible yuan could come sooner than expected. China efforts to establish Shanghai as a global yuan trading hub should help lift controls, Li-Gang Liu said.
In February, the People’s Bank of China outlined a piecemeal plan for loosening controls on the yuan. Although foreign access to capital markets was given a five-year timeline, the central bank was mum on when the yuan would drop its government-managed float.
BOT is going to promote Yuan as the currency for trading, third place after Baht and US Dollars since Thai traders have spent Yuan at 0.3-0.4% of existing foreign currency transactions while US Dollars still dominate the currency trading at 80% of foreign currency trading in Thailand due to the lack of measures against currency fluctuation risk - so BOT is asking People's Bank of China (中国人民银行/中國人民銀行) to allow Forward trading of Yuan as a measure to reduce the exchangew rate risk
Last edited by Wisarut; 16-10-12 at 11:43 AM.
Trading with China demand more Yuan (RMB Cross Border Trades) to reduce the FOREX fluctuation risk but SWIFT (Society for Worldwide Interbank Financial Telecommunication) reported that even though Trade with China getting 11% of the world wide trade volume, the transactions in Yuan (RMB) is just 0.24 % - the 24th level - still too far from being a serious rival against almighty US Dollars, EURO, Yen, and Pound Sterling. Furthermore, 20% of Chinese companies still trade with foreign currency instead of Yuan (RMB) with 3% surcharge applied - despite of the growth of (RMB Cross Border Trades) from 365 companies in 2009 to 60000 companies in 2011.
HSBC even report that annual trade of Yuan in the emerging market is 2 trillion Dollars at least 50% were trading in Yuan denomination and Yuan denomination is for 10.7% of trade volume in the first quarter of 2012.
To turn Shanghai as Financial Hub to compete Hongkong, Singapore, and Tokyo in 2020, Yuan must be liberated by then ... but those financial exports pointing out that it will take 10-15 years to fully convertible of Yuan as a part of Financial liberalization
M2 in Yuan (broad Money) has reached 93.64 trillion Yuan (Larger than M2 of Uncle Sam by 50%) in 2012 - up by 14.1% while new loan is just 505.2 Billion Yuan http://www.manager.co.th/China/ViewN...=9550000138590
Now, Yuan is 6.2920 Yuan per US Dollar in Nov 2012 - going up to meet the new equilibrium
Hongkong allowing Foreigners to open Bank Deposit Accounts in Yuan Denomination in response the status as the Financial Hub which dwarf London, New York and Singapore - after People’s Bank of China has allowed more SWAP in Yuan for Hongkong from 200 Billion Yuan in 2009 to 400 Billion Yuan in 2011
Australian PM signing the MOU with Chinese primier on the direct conversion of Australian dollar with Yuan - the 3rd major country with sign the direct conversion after USA and Japan to boost more trades with China - arealy reached 126 billion US Dollar levels
Now, Direct conversion between Chinese Yuan and Australian Dollar without using US Dollars has become possible at the rate of 6.5118 Yuan per Australian Dollar but it is still long way to go before Chinese Yuan has become fully convertible and become international reserves like US dollars, Japanese Yen and Euro - admitted by Chinese Economists
Along Sino-North Korean borders, 80%-90% of transactions have been done in Renminbi Yuan
Even One night stand with North Korean prostitutes have to be paid in Renminbi Yuan - 50-150 Yuan are the regular rates
Capital Controls on EXIM business to prevent Yuan from rising too high
Appreciating RMB Yuan has cause the forex speculation by Chinese exporters to the point that the government have to stabilized Yuan and allow Yuan to become depreciate to prevent speculation from going worsened ... as more export revenue has been balloted up from 20,000 Million US Dollars at the 4th Quarter of 2012 to reach 102,000 Million US Dollar in the 21st
Allowing Chinese Renminbi to have more flexible movement from 0.5% to 1% - Now, 1 US Dollar is 6.2879 Renminbi
Last edited by Wisarut; 10-05-13 at 07:27 AM.
Tags for this Thread