Tag Archives: Yuan

Zimbabwe to adopt Chinese yuan as legal currency after debt cancellation

In an unprecedented move that signals China’s growing global influence, Zimbabwe has announced that it will adopt the Chinese currency as legal tender.

The announcement came after China cancelled $40-million (U.S.) in Zimbabwean debt earlier this week. China is already Zimbabwe’s biggest trading partner, and Beijing is often praised by the Zimbabwean government, which has adopted a “Look East” policy after years of sanctions by Western governments.

While the decision to adopt the Chinese yuan as legal tender next month is largely a political message by an anti-Western government, it also illustrates China’s economic power in Africa, where Beijing has rapidly become a major investor and the continent’s biggest trading partner.

Read more » The Globe and Mail
See more » http://www.theglobeandmail.com/report-on-business/international-business/african-and-mideast-business/zimbabwe-to-adopt-chinese-yuan-as-legal-currency-after-debt-cancellation/article27914154/

China’s yuan gains IMF reserve status

The International Monetary Fund (IMF) has announced that China’s currency, the yuan, will join the fund’s basket of reserve currencies.

Currently just the US dollar, the euro, the yen and the pound are in the group.

The IMF said the yuan “met all existing criteria” and should become part of the basket in October 2016.

The yuan will now make up part of the IMF’s Special Drawing Rights (SDR) – an asset created by the IMF which serves almost as a currency.

It is used for transactions between central banks and the IMF, and is used to decide the currency mix that countries like Greece, for example, receive when the IMF provides financial aid.

The last change made to the basket was in 2000, when the euro replaced the German mark and the franc.

Read more » BBC
See more »  http://www.bbc.com/news/business-34957580

Russia adds yuan as currency reserve

The Central Bank of Russia has included the Chinese yuan in its reserve currency basket, TASS reports. The move is expected to boost the yuan’s presence in the Russian financial market.

As of December 31, 2014, the latest data available, the US dollar was still dominating Russia’s forex basket at 44 percent. The second most-used foreign currency was the euro with 42 percent. The British pound made up 9.5 percent.

According to Vesti.Finance, the Central Bank made the decision in November, but hasn’t bought the yuan yet.

Read more » RT
See more » https://www.rt.com/business/323639-russia-adds-yuan-reserve-currency/

 

China devalues the yuan, cutting rates by 1.9%

China Rattles Markets With Yuan Devaluation

China devalued the yuan in a move that rippled through global markets, as policy makers stepped up efforts to support exporters and boost the role of market pricing in Asia’s largest economy.

The central bank cut its daily reference rate by 1.9 percent, triggering the yuan’s biggest one-day drop since China ended a dual-currency system in January 1994. The People’s Bank of China called the change a one-time adjustment and said its fixing will become more aligned with supply and demand.

Read more » Bloomberg
See more » http://www.bloomberg.com/news/articles/2015-08-11/china-weakens-yuan-reference-rate-by-record-1-9-amid-slowdown

Toronto becomes first renminbi (Yuan) trading hub in North America

Direct exchange hub could smooth way for businessess doing deals in China

By Pete Evans, CBC News

After stock markets closed on Monday, Toronto became the first trading hub in North America for China’s currency, known as the renminbi or yuan.

Chinese government dignitaries, Federal Finance Minister Joe Oliver and his Ontario compatriot Charles Sousa attended a ceremony in Toronto Monday evening to formally announce the first conversion from yuan to Canadian dollars.

The announcement makes Toronto the first such trading hub in the Americas that has permission to be a clearinghouse for Chinese renminbi (which means “people’s money” in Chinese). There are currently only a handful of such hubs outside China, including Paris, London, Moscow, Singapore, Tokyo, Seoul and Sydney, Australia.

In practical terms, such hubs make it easier to do business with China because without one, Chinese money has to first be converted into a currency like the U.S. dollar before being again converted into loonies to make investments here, or even pay for supplies.

“What the hub does is it provides the potential to get a good price,” says David Watt, the chief economist of HSBC. “It sets up a way for Canadian businesses to call their local banker and say “we’ve got a deal to import Chinese material and we’d like to pay for it in RMB not U.S. dollars.”

The hub eventually will allow people on both sides to take out that middle man and convert renminbi directly into Canadian dollars and vice versa. “It should give Canadian businesses the confidence to increase trade.”

Read more » CBC
See more » http://www.cbc.ca/news/business/toronto-becomes-first-renminbi-trading-hub-in-north-america-1.3005726

The self-centred beggar

by Dr Manzur Ejaz

It is only in the Pakistani media that violation of sovereignty is the focus of discussion rather than Osama’s comfortable living arrangement near an elite military academy. The rest of the world is focusing on Osama rather than the legality of the American operation in Abbottabad.

Probably it is a matter of taste that Prime Minister Yousaf Raza Gilani wanted to hear the same translated lecture from Chinese leaders that Senator John Kerry had given in Islamabad. Maybe it was easier in Beijing because Chinese lectures were (hopefully) directly translated into Urdu or Seraiki. President Asif Ali Zardari may have been given a similar dose in Moscow though the details of his achievements have yet to come out. Both had rushed to the Chinese and Russian capitals to prove their utility to the military brass after the embarrassing US operation in Abbottabad.

It is clear from the published reports that China has flatly told PM Gilani that it does not give budgetary support or cash transfers to countries. They promised some loans on favourable conditions, but this was then sent for approval to the Politburo of the Communist Party. This is an atypical Chinese diplomatic way of saying ‘no’ because such a loan could have been cleared quickly if need be. This simply shows that salvaging Pakistan’s economy is not a Chinese priority or that they take it as a waste of money.

The plan to rush to Beijing was as sane as not knowing that Osama bin Laden was living in Abbottabad near a military academy for the last five years. Probably, there is no method in Pakistan’s madness of decision-making processes. Idealising Pakistan’s strategic worth in global politics, Pakistan’s ruling elite is bereft of common sense. They thought once they announce to the Chinese and Russians that they are getting a legal divorce from the US, Beijing and Moscow would jump all around and shower Yuan and Roubles upon them. No one paused for a moment to think that both China and Russia, victims of jihadi terrorism, agree with the US on the point that terrorist networks must be rooted out of Pakistan. But we have become like street-beggars who develop a habit of asking every passerby for money.

Before PM Gilani had reached Beijing, a senior leader of the Chinese military had declared that his country will not confront the US over Pakistan. And why would China confront the US over Pakistan while its economic interests are heavily vested in the US? Moreover, has China ever confronted the US on any policy other than American policy regarding Taiwan? China has proved to be the wisest nation when it comes to its economic interests. They have economic interests in Pakistan as well but cannot lose the US market, which is their bread and butter. In addition, why would China confront the US for something which, ultimately, safeguards al Qaeda, the Taliban and other jihadi terrorist groups? It is only in the Pakistani media that violation of sovereignty is the focus of discussion rather than Osama’s comfortable living arrangement near an elite military academy. The rest of the world is focusing on Osama rather than the legality of the American operation in Abbottabad.

The Chinese know what the world is saying and are afraid to run into an embarrassing position if the US decides to bring its case against Pakistan harbouring terrorists to the UN. This is the reason that they told Mr Gilani:

One: Pakistan should normalise its relations with India, the US and the rest of the world. The Chinese were telling Pakistan that it is awfully lonely and cannot be supported just by Beijing if the rest of the world stands against it.

Two: the Chinese subtly chided Pakistan for not eliminating the madrassa networks that are producing terrorists. Privately, China has been asking Pakistan to take action against jihadi nurseries but this time they went public on this point.

Three: the Chinese told Gilani that the situation in Afghanistan is improving and Pakistan should not do anything that can stall it.

The Chinese have told Pakistan that they are on the same page as the US as far as the issue of terrorism is concerned and Pakistan should lower its obsession with India. Furthermore, the Chinese have advised that the US is going to be the only source of funds needed for budgetary support for Pakistan. China can invest in infrastructure projects but no cash transfers. Recent assignment of hydro projects to Chinese companies show that China is using its leverage to get better deals from Pakistan than it could if international bids were invited.

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