scorecardresearch
Follow Us:
Monday, October 18, 2021

China opens new front in war as yuan speculation distorts export data

The move came as April exports blew past expectations,which appeared on the surface to indicate that both China’s economy and global demand were on the mend

Written by Reuters | Shanghai |
May 9, 2013 2:33:14 am

China’s central bank signalled on Wednesday it was prepared to change its monetary strategy to fend off inflows of speculative capital,as Beijing struggles to control a tide of cash washing in from overseas markets.

The move came as April exports blew past expectations,which appeared on the surface to indicate that both China’s economy and global demand were on the mend. But economists were quick to suspect the figures were artificially inflated by investors who were disguising speculative bets on the yuan as trade payments.

Faced with the risk that such inflows could cause the yuan to appreciate so quickly that it destabilises exports and the broader economy,the People’s Bank of China (PBOC) has begun intervening heavily in the domestic currency market this year,buying up dollars and selling yuan.

This leaves the question of how to keep the yuan it has sold from distorting domestic markets. On Wednesday morning dealers told Reuters that regulators had queried them for demand for three-month bills.

📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines

For all the latest News Archive News, download Indian Express App.

  • The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.
Advertisement
Advertisement
Advertisement
Advertisement