China Economic News

DBS chief's view on 2016. The "currency wars" and "Yuan" are the key words...

Expect currency wars in 2016, DBS chief warns
08 Jan 2016 09:00
By Melissa Tan

2016 will be a year of "currency wars" and a yuan depreciation could lead to more corporate defaults by unhedged Chinese companies, DBS CEO Piyush Gupta warned on Wednesday, adding that he thinks the greenback could start to weaken as early as the second quarter.

The Singapore economy will also go through "perhaps the trickiest and most sensitive time in its economic transformation that we'll see for a long time", he told DBS private bank clients at a luncheon at the Ritz-Carlton, Millenia Singapore hotel.

In a 20-minute talk, Mr Gupta said he expects China to let the yuan depreciate and the US dollar to possibly weaken in the second half of the year, while Europe and Japan pursue an "easy monetary policy".

"I think if you had to put a label on 2016, I would say this is going to be a year of currency wars. I think everybody, by the end of the year, will all be trying to weaken their currency.
...
Source: Business Times

I really doubt the move, as a sure mean to a currency war.

China policy insiders want quick, sharp yuan decline: Sources

BEIJING/SHANGHAI (Jan 8): China's central bank is under increasing pressure from policy advisers to let the yuan currency fall quickly and sharply, by as much as 10-15%, as its recent gradual softening is thought to be doing more harm than good.

The People's Bank of China (PBOC) has spent billions of dollars buying yuan over recent months to defend the exchange rate, but has failed to stabilise market sentiment. The currency has steadily lost another 2.6% against the US dollar even after the bank sprung a surprise devaluation of nearly 2 per cent in August.

That gradual, managed depreciation makes the yuan a one-way bet for investors who see the currency weaken even as the central bank intervenes to prop it up.

Policy insiders are now calling for a quick and sharp yuan depreciation, backed by tighter capital controls to curb speculation and the flight of money out of the country.
...
http://www.theedgemarkets.com/sg/article...ne-sources

Surely the policy advisers knows what is happening to the economy. They have to devalue quickly to prop up their export which economy is very dependent and also that all important face saving GDP growth target.. Manufacturing PMI negative for quite a while liao, policy makers starting to kanchiong Liao...

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The expectation of Yuan to US$ is 7 in 2016, and 7.5 by end of 2017? It is about 6-7% annually. The Yuan will be freely traded soon, which means market has a larger voice...

DJ Goldman Lowers Yuan Forecast To 7, But Says Won And Ringgit Are Better Shorts -- Barron's Blog

By Shuli Ren

The yuan has more to go if macroeconomic data continues to point weak, according to Goldman Sachs, which lowered its onshore yuan forecast to 7 in a year, and 7.30 by the end of 2017.

"It is probably not a coincidence that the most recent moves towards weaker fixes have coincided with the release of indifferent PMI data. But, in addition, the publication of the new CNY trade-weighted baskets in December also hints at the greater willingness of policy makers to allow the CNY to weaken in response to weaker activity and capital outflow pressures", noted the bank.
...
(END) Dow Jones Newswires

January 10, 2016 19:31 ET (00:31 GMT)

Copyright © 2016 Dow Jones & Company, Inc.

Source: Dow Jones

(11-01-2016, 09:48 AM)CityFarmer Wrote: The expectation of Yuan to US$ is 7 in 2016, and 7.5 by end of 2017? It is about 6-7% annually. The Yuan will be freely traded soon, which means market has a larger voice...

DJ Goldman Lowers Yuan Forecast To 7, But Says Won And Ringgit Are Better Shorts -- Barron's Blog

By Shuli Ren

The yuan has more to go if macroeconomic data continues to point weak, according to Goldman Sachs, which lowered its onshore yuan forecast to 7 in a year, and 7.30 by the end of 2017.

"It is probably not a coincidence that the most recent moves towards weaker fixes have coincided with the release of indifferent PMI data. But, in addition, the publication of the new CNY trade-weighted baskets in December also hints at the greater willingness of policy makers to allow the CNY to weaken in response to weaker activity and capital outflow pressures", noted the bank.
...
(END) Dow Jones Newswires

January 10, 2016 19:31 ET (00:31 GMT)

Copyright © 2016 Dow Jones & Company, Inc.

Source: Dow Jones

http://www.bloomberg.com/news/articles/2...-time-high

The cost of borrowing yuan in Hong Kong jumped by the most on record, reflecting tighter supply of the currency following suspected intervention by the Chinese central bank.
The overnight Hong Kong Interbank Offered Rate surged 939 basis points to 13.4 percent on Monday, the highest since the Treasury Markets Association started compiling fixings in June 2013. The one-week rate jumped 417 basis points to 11.23 percent.
“Yuan liquidity is extremely tight in Hong Kong,” said Becky Liu, senior rates strategist at Standard Chartered Plc in Hong Kong. “There was some suspected PBOC intervention last week, and the liquidity impact is starting to show today.”

The offshore yuan’s 1.7 percent decline last week pushed its discount to the Shanghai price to a record, prompting the International Monetary Fund to say that it will discuss the widening spread with the authorities. The gap was last at 1.4 percent.

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China bopian now, join the SDR and float currency means it can kena shorted and depreciate very easily by traders. Let's sit back and see if they crash and burn. I can see Soros rubbing his hands in anticipation again..

(11-01-2016, 12:10 PM)BlueKelah Wrote: China bopian now, join the SDR and float currency means it can kena shorted and depreciate very easily by traders. Let's sit back and see if they crash and burn. I can see Soros rubbing his hands in anticipation again..

Don't forget the outcome might be similar as HKMA vs "double play" in 1998. Short positions against the Hong Kong dollar were effectively squeezed out within month.

http://blogs.ft.com/gavyndavies/2015/07/...kong-then/

Bloomberg - London Hedge Fund Omni Sees 15% Yuan Drop, and More in a Crisis http://bloom.bg/1SHCsfg

Credit crisis being the key word.

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(11-01-2016, 03:54 PM)CityFarmer Wrote:

(11-01-2016, 12:10 PM)BlueKelah Wrote: China bopian now, join the SDR and float currency means it can kena shorted and depreciate very easily by traders. Let's sit back and see if they crash and burn. I can see Soros rubbing his hands in anticipation again..

Don't forget the outcome might be similar as HKMA vs "double play" in 1998. Short positions against the Hong Kong dollar were effectively squeezed out within month.

http://blogs.ft.com/gavyndavies/2015/07/...kong-then/

Dun forget what happened to bring about the Asian financial crisis 1997, debt fueled growth 8-10% with debt to GDP ratios of over 100% in many countries, similar outcome might be happening again

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(11-01-2016, 04:58 PM)BlueKelah Wrote:

(11-01-2016, 03:54 PM)CityFarmer Wrote:

(11-01-2016, 12:10 PM)BlueKelah Wrote: China bopian now, join the SDR and float currency means it can kena shorted and depreciate very easily by traders. Let's sit back and see if they crash and burn. I can see Soros rubbing his hands in anticipation again..

Don't forget the outcome might be similar as HKMA vs "double play" in 1998. Short positions against the Hong Kong dollar were effectively squeezed out within month.

http://blogs.ft.com/gavyndavies/2015/07/...kong-then/

Dun forget what happened to bring about the Asian financial crisis 1997, debt fueled growth 8-10% with debt to GDP ratios of over 100% in many countries, similar outcome might be happening again

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The main trigger of the AFC is high foreign debt, rather than overall debt. FYI, the level of foreign debt then was 60% of GDP. The current China foreign debt is about 16% of GDP.
Source: https://en.wikipedia.org/wiki/List_of_co...ernal_debt

Wrong references, seem getting more frequent with your posts recently 

how to have a credit crisis when can print money?....and now a reserve currency.