Chinese on PR offensive as central bank devalues yuan for third consecutive day

[rohanixx]

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Wa ko kasabot ani, abi ba nako nga pag weak ang currency unstable ang economy sa usa ka country..(Pasabta ko please...)Chinese on PR offensive as central bank devalues yuan for third consecutive day | Daily Mail Online

China’s public relations machine went into overdrive yesterday after its central bank devalued its currency for the third consecutive day. Global stockmarkets rallied as officials at the People’s Bank of China dismissed concerns that it plans to cut the yuan more aggressively - triggering a global ‘currency war’ as other countries follow suit.
In a hastily convened and rare press conference deputy governor Zhang Xiaohui stressed there was ‘no basis for persistent and substantial devaluation.’




He added that yuan was close to ‘market levels’ after two days of decline which knocked more than 4 per cent off its value.
Another deputy governor, Yi Gang, said claims that it is trying to engineer a 10 per cent fall in the yuan as ‘groundless’, after it devalued its currency for the first time in 20 years. And Ma Juan, an economist at the central bank, said: ‘China does not have the need to start a currency war to gain advantage.

The central bank is desperately trying to allay fears that the devaluation is a ploy to boost its flagging exports by making its goods cheaper for other countries.


But it has sparked an angry response from US politicians, with Republican presidential candidate Donald Trump warning China’s actions could be ‘devastating’ for US exports. China does not have the need to start a currency war to gain advantage Ma Juan, central bank economist The reassurance from Beijing appeared to soothe the nerves of many investors, with markets rallying across Asia and Europe.


Economists at Deutsche Bank said the devaluation of the Chinese currency may cause the US Federal Reserve to delay raising interest rates because of lower inflation. It said this caused stock markets to ‘grind higher’. America’s central bank had been expected to increase rates as soon as next month. The FTSE 100 index of the UK’s biggest blue chip companies barely moved, dropping just 0.04 per cent, or 2.86 points to 6568.33.




This is an improvement on Wednesday when £24billion - or 1.4 per cent - was wiped off the value of the key stock market. China appears to have discovered a love for active FX intervention Chris Beauchamp, market analyst Luxury fashion house Burberry, which had been heavily hit over the previous two days as it relies on exporting to China, recouped some of its losses. But some economists remain unconvinced about China’s intentions, and predicted its actions may yet spark a currency war. Chris Beauchamp, senior market analyst at investment firm IG said: ‘China appears to have discovered a love for active FX (foreign exchange) intervention. The spectre of currency wars was worrying enough yesterday, but today it looks real enough to touch.’

[salbahis]

sa ako pagsabot... devaluation results to expensive imports, sakto ba?

[dulasnom]

the advantage of devaluation is that you will attract more countries in importing your goods.
this would result to an increase in your exports.
that's the chinese motto.
"bisan piso ginansya kada-usa basta daghan mo-palit, dako kita"
this is also a way of killing the competition.

i remembered a friend (half-chinese) who told me that he heard his father (full chinese blood) once that said
"bisan maka-ginansya lang ko ug piso sa kada taw nga mo-agi, malipay na ko."
note: they had a store beside a road.

[anggwaponi]

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How the Philippines is coping with China risks
NOTE: News link courtesy of cnbc.com

[Sarevok]

Strategy na. If mugamay ang value sa imo kwarta. Dako ginansya ang exporters.

[M.A.D.]

China is still far from a mature economy wherein they will mostly get their GDP from domestic sources(read: local consumption and imports). They are still in transition from export-based(lower purchasing power for yuan but cheaper exports) to import-based(higher yuan purchasing power but cheaper imports, higher wages and a higher quality of life for people in general.

Well they just wanted to get there fast, and they got there fast and fell faster.

But most importantly, they need to do something with the Yuan because it is pegged to the US dollar(which has been bullish lately) which has caused the Yuan to appreciate adversely affecting their exports. Plus they have to decouple/de-peg the Yuan and let it float by market terms so it can be included in IMFs SDR(special drawing rights) -- the path towards a reserve currency.

[anggwaponi]

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PH finance chief hits Chinese yuan devaluation
NOTE: News link courtesy of Inquirer.net

[anggwaponi]

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China's military parade was a massive display of political weakness
NOTE: News link courtesy of theweek.com

[<SMILE>]

They can compete for they still have the cheapest labor cost and of course those who would resist to work with meager income will face the consequences. A communist with so much resources and absolute power at his disposal is a formidable antagonist to reckon with.

[<SMILE>]

BEIJING (AP) -- China's foreign exchange reserves fell by a record $93.9 billion in August as the central bank spent heavily to support its currency's exchange rate following a surprise devaluation.

Reserves declined to $3.557 trillion as of the end of August, according to the People's Bank of China. They remain by far the world's largest despite August's fall.

Currency traders bet the yuan would fall further after the Aug. 11 devaluation that rattled global financial markets, putting downward pressure on the exchange rate and prompting the central bank to buy the currency to support its value.

The central bank said the devaluation was part of efforts to make the yuan's state-set exchange rate more market-oriented. But the change, coming at a time of weakening Chinese economic growth, prompted suggestions it was trying to give struggling exporters a price advantage.

Analysts said the devaluation was too small to make a difference in trade but it fueled concerns of a possible "currency war" if other governments responded by weakening their own exchange rates.

"China will be facing a difficult situation, where efforts to support the yuan may be increasingly untenable," said Bernard Aw of IG Markets in a report.

Beijing amassed its foreign exchange reserves over the past two decades through buying currency to prevent the yuan from rising too fast against the U.S. dollar and hurting Chinese exporters.

At a meeting of Group of 20 finance officials last weekend, People's Bank Gov. Zhou Xiaochuan said the yuan had reached a stable exchange rate against the dollar, according to a central bank statement.
https://sg.finance.yahoo.com/news/ch...025847714.html