The yuan rose above 6.8 to the dollar

The Market Risks That Can Spoil August (IV): The Yuan

Intermoney | The unanimous approval by the Senate of a law to reduce or eliminate the tariffs applied to around 1,660 products made outside the US, of which half are made in China, could be the perfect excuse for Trump to return to the charge on trade attacks on Chinese interests. However, as we have insisted over the last few weeks, the key to the summer from a Chinese perspective, could lie more in the yuan than trade issues.

The yuan rose above 6.8 to the dollar

Renminbi Rising

Barry Eichengreen via Caixin | The New Year has seen a flurry of positive news about yuan internationalization. On January 15th the Bank of France announced that it had added the yuan to its reserve portfolio. The National Bank of Belgium reported the next day that it had acquired 200 million euros worth of yuan-denominated assets.

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The Real Situation Of China’s Reserves

In the Asia Times there is an article about the tricks China has begun to use to conceal the truth about its foreign currency position. Up until December, China released the two figures corresponding to foreign currency reserves, that of the Central Bank and that of the banking sector (which let’s not forget is state-owned).

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What’s Really Causing Concern In China

It’s not the slowdown or the devaluation of the yuan which is really worrying, but China’s reforms. Economic reform, which should lead to a free market. And political reform which, unfortunately for the Chinese people, will be some time coming.