Here's another indication that the price inflation in China is much greater than the official reports of around 4.0%.
Gold exchanges in China outside of two in Shanghai have been banned, according to a statement from the the People's Bank of China, the Ministry of Public Security and other regulators. This is a clear sign of panic among government officials. Chinese people were protecting themselves against the inflation by buying gold.
Until this order, gold exchanges operated throughout China.
"No local authority, institution or individual is allowed to set up gold exchanges," said the notice dated December 20.
The statement also said that the Shanghai Gold Exchange and the Shanghai Futures Exchange are enough to meet domestic investor demand for spot gold and futures trading.
The PBOC said it would lead a team to insure that gold exchanges will be closed, banks will stop providing clearing services to them; and some people will be put under police investigation for possible irregularities at exchanges.
Showing posts with label People's Bank of China. Show all posts
Showing posts with label People's Bank of China. Show all posts
Tuesday, December 27, 2011
Tuesday, June 22, 2010
China Government Economist Says Yuan Could Depreciate
Yi Xianrong, an economist with the Chinese Academy of Social Sciences warned in a China Daily op-ed piece that the central bank's latest stance does not necessarily foreshadow a yuan revaluation.
"A flexible yuan exchange rate leaves the possibility of both appreciation and depreciation, with market elements exercising the largest say in deciding which tendency should dominate," he said.
This is clearly a different view from that of most global observers and falls more into line with the comments of Nouriel Roubini.
Bottom line: This looks more like a decoupling than a serious revaluation of the yuan.
"A flexible yuan exchange rate leaves the possibility of both appreciation and depreciation, with market elements exercising the largest say in deciding which tendency should dominate," he said.
This is clearly a different view from that of most global observers and falls more into line with the comments of Nouriel Roubini.
Bottom line: This looks more like a decoupling than a serious revaluation of the yuan.
Chinese Yuan has Biggest DECLINE since 2008
The yuan declined 0.2 percent to 6.8111 per dollar as of 10:17 a.m. in Shanghai, from 6.7976 yesterday, according to the China Foreign Exchange Trade system, reports Bloomberg.. That was the biggest loss since December 2008.
This occurred even though PBOC had set the yuan's daily reference rate 0.43% higher against the dollar, relative to yesterday's close.
Clearly, markets are beginning to understand that the Chinese announcement over the weekend was not as much about the PBOC allowing a huge spike higher in the yuan, as it was an announcement about returning to a basket of currencies as its reference. A basket currency approach is, of course, a dilution of the role the dollar will play in the valuation of the yuan.
This occurred even though PBOC had set the yuan's daily reference rate 0.43% higher against the dollar, relative to yesterday's close.
Clearly, markets are beginning to understand that the Chinese announcement over the weekend was not as much about the PBOC allowing a huge spike higher in the yuan, as it was an announcement about returning to a basket of currencies as its reference. A basket currency approach is, of course, a dilution of the role the dollar will play in the valuation of the yuan.
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