Friday, November 22, 2013

PBOC Says Boosting Reserves No Longer Beneficial

Hey, China. Can we get all those jobs back?

Posted By on Fri, Nov 22, 2013 at 11:00 AM

shutterstock_162136307.jpg

The People’s Bank of China announced that the it doesn't benefit the country to increase its foreign-currency holdings. The yuan continues appreciate and China's foreign-exchange reserves surged $166 billion in the third quarter to a record $3.66 trillion.

“It’s no longer in China’s favor to accumulate foreign-exchange reserves,” Yi Gang, a deputy governor at the central bank, said in a speech organized by China Economists 50 Forum at Tsinghua University yesterday. The monetary authority will “basically” end normal intervention in the currency market and broaden the yuan’s daily trading range, Governor Zhou Xiaochuan wrote in an article in a guidebook explaining reforms outlined last week following a Communist Party meeting.

So who's going to take care of the U.S. government's debt? 

Less intervention and smaller gains in foreign-exchange reserves may damp China’s appetite for U.S. government debt. The nation is the largest foreign creditor to the U.S. and its holdings of Treasuries increased by $25.7 billion, or 2 percent, to $1.294 trillion in September, the biggest gain since February. U.S. government securities lost 2.6 percent this year, according to the Bloomberg U.S. Treasury Bond Index. (BUSY)

Sacha Tihanyi, senior currency strategist at Scotiabank in Hong Kong, says that Yi's comments doesn't mean that the country will be cutting its holdings of U.S. government debt.

“They are probably going to keep their allocations reasonably stable unless there’s a big policy shift, but it means they will possibly be buying less at the margin,” (Tihanyi) said.

(via Bloomberg)

Tags: , , , , , ,

Comments (3)

Showing 1-3 of 3

Add a comment

 
Subscribe to this thread:
Showing 1-3 of 3

Add a comment

Today | Tue | Wed | Thu | Fri | Sat | Sun
Burlesque Fitness

Burlesque Fitness @ Floor Polish

Mondays, Wednesdays, 4:30-5:30 p.m.

All of today's events | Staff Picks

Staff Pick

Tucson International Mariachi Conference

The Tucson International Mariachi Conference was created to pass mariachi traditions to the next generation. 4/26 @… More

@ AVA: Anselmo Valencia Tori Amphitheater Thu., April 26, 6-8 p.m., Fri., April 27, 7-9 p.m. and Sat., April 28, 11 a.m.-11 p.m. Casino del Sol, 5655 W. Valencia Road.

» More Picks

Submit an Event Listing

Popular Content

  1. The Strike Is On: Arizona Teachers Prepared for Walkout Next Week (The Range: The Tucson Weekly's Daily Dispatch)
  2. Antigone Books To Be Sold to Three Employees (If They Can Raise Some More Cash) (The Range: The Tucson Weekly's Daily Dispatch)
  3. The Weekly List: 17 Things To Do In Tucson This Week (The Range: The Tucson Weekly's Daily Dispatch)
  4. The Weekly List: 24 Things To Do In Tucson This Week (The Range: The Tucson Weekly's Daily Dispatch)
  5. A Partial List Of UA Freedom Center's Funders (The Range: The Tucson Weekly's Daily Dispatch)

© 2018 Tucson Weekly | 7225 Mona Lisa Rd. Ste. 125, Tucson AZ 85741 | (520) 797-4384 | Powered by Foundation