» 06/21/2010, 00.00
Yuan jumps 0.43 per cent to five-year high
Two days after the China’s central bank announces greater flexibility, yuan rises significantly. Chinese shares gain immediately, pulled by airliners and property shares. Everyone is now waiting for tomorrow to see if the trend will last and what the PBOC will do.
Beijing (AsiaNews/Agencies) – The yuan reached a five-year high on Monday with 6.7969 to the US dollar, up 0.43 per cent from Friday's close of 6.8262, two days after the People's Bank of China (PBOC), the mainland's central bank, stepped aside and let broad gains on the first trading day after it ditched the currency's two-year peg to the US dollar. Traders reacted positively, pushing shares up in China, with Hong Kong up more than 3 per cent pulled by property shares, financials and airlines.
For analysts, the PBOC appears willing to let the market find its feet and not intervene. The result is that the yuan posted its biggest daily gain against the dollar since its revaluation in July 2005, with the central bank staying true to its weekend pledge that it would allow greater currency flexibility.
Many agree that only tomorrow will the markets see how far the yuan will go, and thus get a sense of how much the PBOC will allow the yuan to rise in one day.” Few in fact expect the Chinese currency to rise as much as it did today. Indeed, by late afternoon, the yuan was trading near 6.815 after banks that shorted US dollars had to cover their positions before the end of the day.
After announcing an end to the peg on Saturday, the PBOC yesterday stressed that a substantial appreciation in the currency was "not in China's interests" and that the exchange rate would remain "basically stable".
Beijing’s move comes one week before the G20 summit in Toronto, which include the world’s top economies, plus the European Union.
For years, Western powers, including Japan, have accused China of keeping its currency artificially low, demanding that its trading be liberalised. With its recent move, Beijing earned appreciation and positive comments from governments around the world.
In China too, markets reacted positively to the announcement. In Hong Kong, the Hang Seng jumped 3.08 per cent with property shares, financial institutions and airline companies leading the way.
On the mainland, the key stock index rose 2.9 per cent to its highest close in three weeks, as markets anticipated that Beijing would allow the yuan to strengthen, signalling the government's confidence in the economy.
In Shanghai, the Composite Index also rose with airlines major gainers, as investors anticipated a reduction in US dollar-based costs for aircraft and fuel. Property shares also went up because a rising yuan is likely to boost investments and sales.
For New Year, China's central bank has to come up with 610 billion in cash
Such an amount is what the Chinese are expect to spend during the Lunar New Year holidays. Central bank officials must find enough liquidity without stoking inflation. At the same time, they must ensure that money markets do not seize up, and affect consumer spending. Compounding everything, some 24 IPOs are expected to lock up about 2 trillion yuan.
Top mining company responsible for major spill in Fujian, three top officials arrested
Zijin Mining Group admits toxic spill polluted Ting River, blames accident. Investigators say leakage was deliberate as witnesses point out that latest incident was the third since June. This time, Beijing appears to be serious about cracking down.
Chinese state-owned banks buy a lot of dollars, yuan loses values
Yuan has small swing back. Its initial rise at the start of the day ends when Chinese banks buy up dollars. Experts say only time will tell how much Beijing is willing to let its currency appreciate. Meanwhile, it can face criticism more easily at this week’s G20 summit.
12/03/2016 16:14:00 CHINA
China’s central bank reassures world that growth targets reachable
Governor Zhou Xiaochuan pledges not to use “exchange rates or other monetary policies to stimulate exports", nor resort to massive capital injections.
Chinese shares drop as Shanghai loses 6.15 per cent
Shenzhen closes down by 6.58 per cent. Shares drop after China’s central bank offered loans to commercial lenders, a move viewed as desperate by analysts. Meanwhile, the yuan’s devaluation continues to make waves.
Pope Francis tells young people that “genuine love” is not a “soap opera”, but Christians’ real identity card
In his homily for the Jubilee of Teens, Pope Francis asked questions and gave answers to the 70,000 present. Stressing the great ideal of love as giving oneself “without being possessive”, he noted that freedom is “being able to choose the good”. He warned young people “who dare not dream,” telling them that “If you do not dream at your age, you are already ready for retirement”. He also received funds raised for the Ukraine, and appealed for the release of bishops and the priests held in Syria.
Odd alliance between the US and Iranian fundamentalists
Washington is still preventing the use of US dollars in transactions with Iranian banks, preventing business with the outside world in spite of the nuclear deal. This way, the US is helping Khamenei and the Revolutionary Guards, who want to torpedo the agreement in order to maintain their hold on power. Meanwhile, most Iranians hold down two or three jobs just to make ends meet. An unstable and bellicose Iran is a boon for arms sales. A report follows.
29/04/2016 NORTH KOREA- USA
26/04/2016 SYRIA - TURKEY
AsiaNews IS ALSO A MONTHLY!
AsiaNews monthly magazine (in Italian) is free.