The new rate of the yuan, why the Chinese authorities to weaken the national currency?
The People's Bank of China on August 11 lowered the rate of the national currency by 1.9% - from 6.1162 to 6.2298 yuan per dollar, which was one of the main news of the world economy. The People's Bank of China (central bank) on Tuesday lowered the rate of the yuan against the dollar by 1.9%. The Russians, who in the autumn of last year living in a free exchange rate, such fluctuations may seem very insignificant. However, when it comes to the Chinese currency, even like changes become one of the main world news. The agency Bloomberg has said the decision of the Chinese regulator to establish the so-called average exchange rate of the yuan to the dollar at 6.2298 against 6.1162 the previous day a record one-day decline since the unification of China in 1994, the official and market exchange rates. The response to the People's Bank of China in the world is ambiguous. On the one hand, they welcomed the European Commission, which is called the decision to reduce the rate "positive development" and some experts who believe that China is moving to liberalize the foreign exchange market. But there is also the opposite view - according to analysts, in China, on the contrary, there is a "crackdown" and positive current developments world markets promises. The new exchange rate regime The European Commission welcomed the devaluation of the yuan The People's Bank of China confirms that the measure was disposable. Chinese regulators also promises to maintain the stability of the yuan to the "rational" level and to strengthen the role of the market in determining the fixing. "It seems that this is the end of the fixing mode, which we knew before. One-time depreciation of currencies and allowing the market to take part in the determination of the fixing leads us into the new currency Mode "- quoted Bloomberg analyst Australia & New Zealand Banking Group Ltd in Singapore Goh Kun. The People's Bank of China was named one of the factors reducing the high effective exchange rate. Financial authorities have stated that a stronger yuan is putting pressure on exports. Get rid of the dollar Binding to the expensive dollar has indeed become costly to the Chinese economy. Last Saturday, the Chinese authorities released macroeconomic data for July. Chinese exports fell by 8.3% in annual terms, while analysts expected reduction in the rate of 1%. Overall, the total exports from the beginning of the year was lower than the corresponding values ​​last year. Analyst: the depreciation of the yuan to the dollar - a step towards the internationalization In this regard, a small devaluation can be considered as a response of the authorities to deteriorated performance in international trade and is intended to improve the competitiveness of products in foreign markets, says principal analyst at the investment department of "VTB 24" Stanislav mites. I agree with him director of the Institute of World Economy at the Academy of Contemporary International Relations Chen Fenin. "It's kind of adjustment. For a long time, the US dollar continuously strengthened, while the exchange rate of the yuan against the dollar has remained relatively stable. It can to create pressure and a space for the fall of the yuan, so need to be adjusted, "- said the expert of RIA Novosti. Yuan of International? Fenin Chen also believes that the sharp depreciation yuanya- step towards the internationalization of the Chinese currency. "It is our goal (conversion of the yuan a reserve currency - ed.). Making the currency market character - one of the stages. In the process, giving market-based exchange rate - necessity. The result should be to make the yuan an international currency, it is kind of a big motion vector and strategy. Present the adjustment is incomplete, but still is a step towards the internationalization of the yuan, "- said the economist. The free swimming early However, the head of the program "Russia in the Asia-Pacific region," the Moscow Carnegie Center Alexander Gabuev believes that the decision of the Chinese regulator is due, rather, domestic political reasons, rather than a desire to liberalize and strengthen the international position of the yuan. China is in no hurry to let the yuan float market "The fact that the decision of the People's Bank official plans caused by Chinese exports. It is obvious that these sags throughout the year, and the challenge now is to encourage export sector. There are clusters of provinces and export-oriented enterprises, where people lose their jobs and lose their livelihood. This may cause serious social consequences, and is the first and main concern parties - to prevent such social consequences "- said Gabuev RIA Novosti. According to him, the anxiety of the authorities is not only statistics on exports, which is perhaps even worse than the official, but specific corporate news - Taiwanese company Foxconn, which produces the iPhone, has decided to open a new manufacturing base in India and to transfer part of the operations. The expert does not believe that the decision of the People's Bank can be explained intention of the authorities to liberalize the approach to defining the exchange rate, strengthening the role of market mechanisms. He recalled that, before the IMF gave a positive assessment of the recent exchange rate of the yuan, whereas previously stated that it is undervalued. The financial institution even talking about the inclusion of the yuan in the basket SDR (Special derivative rights), if it eliminated a number of restrictions on the movement of capital. "Now it is impossible to expect. I think that the current solution is not dictated by the prestigious expectations of inclusion in the basket of reserve currencies, and the desire to follow the prescriptions of the IMF and concern particular the millions of people who work in the province Gaundun. Actually that was filming the party bureaucratic restrictions on expectations of capital now can not speak. Rather, many expected to reverse the trend, including due to the collapse of the stock market ", - said Gabuev. According to him, the conclusion that Beijing could make both stories: swimming in the market and let the currency and financial system early, the levers of control over finances, that is, the need to keep. Threat to Dollar Analysts: the weakening of the yuan is likely to hit the world economy Experts also believe that the weakening of the yuan in the long term can lead to instability in global financial markets. Analyst at NAS Broker Mikhail Fedorov, in particular, It recalls that China has the world's largest financial reserves, it has investments in US Treasury bonds in the amount of $ 1.2 trillion, almost equal to general reserves of 4 trillion dollars and it is only the public finances. It should be borne in mind that the Chinese banks are now the largest in the world, their foreign assets as calculated in trillions of dollars. And if you need to support the economy of the country, these amounts may be go to the course. "All the dollars that are in the bins of China, once issued, can arrange a flood of liquidity. The world will not be able to digest the released reserves of China, because China can easily throw and a trillion and two trillion dollars. And it is important that it is not necessary to start the Chinese authorities to sell their reserves. Commercial Bank of China and without the state first can start saving your inner balance and start selling foreign assets and reserves, and they have a lot of money, "- says Fedorov. As a result, it may happen that the crisis in China any more dangerous for the US dollar and the US, not China itself. "China is accumulating dollars, sterilize them, withdrawing from circulation, and thus did not give a dollar increase of money in circulation, if China starts to sell reserves, it will unleash sale a huge amount of dollars, and the amount of dollars that can liberate China might multiply exceed the volume of the program QE ", - the expert believes. short term loans uk



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