This is not making officials back at the home office happy, and can only mean one more straw on the camel's back that will cause China to continue to distance itself from the dollar.
Sovereign wealth fund, China Investment Corp (CIC), has funds frozen in Reserve Primary Fund (RPF).
RPF suspended redemptions last month when it became the first money market mutual fund to 'break the buck'.
CIC said Wednesday that it had asked RPF to return CIC's funds in full, prior to the US fund's move to freeze redemptions, claiming that the US fund also had sent a written confirmation that it will return CIC's principal in full along with interest.
CIC also claimed to be a creditor of RPF, suggesting it will be among the first in line to be repaid, but an RPF statement indicates it classifies CIC as an investor.
Neither CIC nor RPF have stated how much CIC invested with the fund.
CIC was established by the Chinese government in late 2007 with 200 bln usd in capital. Its mission is to obtain better returns on China's foreign exchange reserve holdings.
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