Hong Kong Bank Loans Spark Worries
Fears on Leveraged Bets Related Video fluctuations of many currencies, it reprented a massive
零基础英语速成shift for the tightly controlled yuan. The incread
sflintervention, according to people familiar with the PBOC's thinking, is part of the central bank's
preparations to introduce more changes to its foreign-exchange policies.
The central bank ts a daily benchmark for the yuan, also known as the renminbi, and allows investors to
push the currency's value 1% in either direction from that t rate. The PBOC said recently that it plans to
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widen the trading range for the yuan in 2014 in an orderly manner.
But with the currency having steadily appreciated for years
despite a few blips, speculators have been pouring money
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into China in expectation of continued gains. The central
bank wants to drive down the currency's value to introduce
wider two-way trading swings, put speculators off balance
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and relieve pressure on the currency, according to the
people clo to the PBOC.
Some analysts think the yuan has further to fall, although few view the recent moves as anything more
than a temporary departure from a longer-term trend of steady appreciation given China's still-substantial
growth.
The yuan "faces further near-term downward pressure before a real two-way expectation is established,"
China's central bank is deliberately pushing the yuan
down to prepare the currency for wider trading. Geoff
Kendrick, head of Asian foreign exchange and rates
strategy at Morgan Stanley, spoke to the WSJ's Jake
Lee about the RMB moves.
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China's yuan notched its biggest one-day fall since 2005 as China's central bank stepped up efforts to留学梦
中国国际学校排名weaken the currency. An employee counts Chine yuan bank notes at a bank in South Korea on
Thursday. Bloomberg News
said analyst Jian Chang at Barclays Capital. Still, Ms. Chang said she was sticking to her forecast that the yuan would strengthen to 5.95 per dollar by the end of this year, citing China's continued trade surplus and capital inflows.
The persistent ri in the yuan in the past year has led to a large amount of speculative capital inflows, some of it circumventing cross-border controls. UBS AG estimates that so-called hot-money inflows amounted to more than $150 billion in 2013. That is out of $244 billion of total capital inflows last year, according to the country's foreign-exchange regulator. Data suggest the trend accelerated in January, as banks bought a net $76.3 billion from their clients in January, a one-year high, according to the regulator.
The influx has complicated Beijing's efforts to manage the economy, contributing to soaring property prices and injecting excess cash into the financial system.
China has a $3.8 trillion war chest of foreign-exchange rerves, which it could deploy to bolster the yuan, although PBOC officials have said in the past that the bank would avoid routine intervention in the foreign-currency market in an effort to make the yuan a more market-bad currency.
A weaker yuan in theory helps exporters, lowering the price for their goods internationally when they are struggling to compete with cheaper rivals in countries including Vietnam and Bangladesh. But the people with knowledge of the central bank's thinking said the recent intervention wasn't about lending support to the export ctor, pointing to the yuan's long track record of appreciation. The yuan has strengthened more than 30% since its revaluation in 2005 and has gained against the dollar every year since 2010, including a 2.9% ri in 2013 when currencies in some emerging markets tumbled.
"There is no reason to backtrack on currency reforms," one of the people said.
Many analysts inside and outside China agree, believing the exporters have lost a battle to keep the yuan's value low. "The exporter lobby has lost," said Damien Ma, an analyst at the Paulson Institute in Chicago, a think tank founded by former U.S. Treasury Secretary Hank Paulson.
美国之声广播电台Some exporters said that after years of rising in value, the currency would have to depreciate further
and stay there to help their business.
"I was glad to hear about it, but I'm not going to go out and open a bottle of champagne," said Dave Hon, chief executive of Dahon Bikes, a U.S. company that makes folding bikes at factories in China's southern Guangdong province and mostly lls them to the U.S.
Mr. Hon said only sustained depreciation of the yuan would help companies like his. Like other companies that deal with multiple currencies, Mr. Hon said Dahon Bikes also has hedging contracts in place to limit the impact of the yuan's short-term volatility.
Uwe Hutzler, the German general manager at China-registered Heshan Bestway Leather, another manufacturer in Guangdong, was skeptical that the yuan's weakness would last. "The upward trend goes on," he said.
狮子王英文版电影China has long been accud by critics in the U.S. and Europe of keeping the yuan weak to boost Chine exports.
"The latest move by the People's Bank of China is yet another clear-cut example of foreign-currency manipulation and the need for my legislation to stop it," said Rep. Tim Murphy (R., Pa.), who has sponsored a Hou bill targeting China's currency practices.
