China playing dangerous game of selling forex reserves – the new indian express


BEIJING: In a rare criticism, a researcher of a state think-tank accused China’s central bank of playing “dangerous game” of selling the reserves to defend weakening yuan amid rapid decline in the world’s largest forex reserves that shrank by USD 1 trillion.

“China’s central bank, the People’s Bank of China (PBOC), is playing a dangerous game using the precious foreign reserves to defend the yuan as it could leave the country defenceless in an increasingly volatile world,” Zhang Ming, senior fellow at the Institute of World Economics and Politics under the state-run Chinese Academy of Social Sciences, said.

Instead PBOC should take a hands-off approach to the currency and focus on safeguarding foreign exchange reserves, he said.

Exchange rate us canadian dollar “Forex reserves are valuable assets that (China) can use at critical times. 100 aud to usd It’s a pity that they are being sold heavily in the market.It should be the last resort,” Zhang has been quoted by the Hong Kong based South China Morning Post as saying. Gold price in usa per ounce Zhang said the PBOC was betting on “the weakening of the US dollar and a domestic economic rebound”.

His criticism, which is rare in China’s tightly controlled governing system came as forex reserves shrunk by almost a USD 1 trillion since June 2014 as the central bank has sought to prevent a large fall in the yuan against the US ­dollar. Pound to usd conversion As per the recent official figures the reserves stands at about USD 3.05 trillion. Stock meaning in urdu Zhang’s call for Beijing to reverse the policy and abandon its heavy intervention in the foreign exchange market is gaining traction among researchers, the report said. Futures market hours of operation China’s yuan was devalued by about 8 percent last year.

It is currently trading around 6.80 to a dollar and expected to decline further by about five per cent. Stock market definitions terms The criticism may add gist to US President Donald Trump’s criticism during his campaign that China is manipulating its currency. Equity meaning in real estate Zhang Bin, another researcher at the Chinese Academy of Social Sciences, agreed that Beijing should free up controls on the yuan’s exchange rate by reducing government intervention in the market. E mini dow trading hours “Floatation does not mean a large devaluation,” he said. Binary decision tree “Actually, a one-off devaluation [of the yuan] doesn’t need to be big, and [the currency] may rebound as well. Commodity futures market By doing this it will help the domestic economy,” he said.

Tsinghua University professor Zhu Ning also said earlier that Beijing should let the market determine the yuan’s exchange rate. Hockey blackhawks The prospects of this approach becoming a policy option appear to be rising, especially with the Zhang Ming said the real loss in reserves may be higher than USD 1 trillion because there were ways the central bank could cover some of its interventions in the market, including borrowing dollars, by using its overseas assets as collateral or selling dollars in forward markets. Pound exchange rate history But he added that there was no evidence to prove this had happened. Code translator If PBOC had carried out these actions it was because it was pinning its hopes on the dollar finally weakening, Zhang said.

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