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(Bloomberg) -- China reduced the amount of foreign currency deposits banks are required to hold as reserves for the first time this year, in a more visible step to prop up the under-pressure yuan. The PBOC has ramped up support for the currency via tools such as setting stronger-than-expected daily reference rate, prompting state banks to sell dollars and tightening offshore yuan liquidity to squeeze shorts. [Extracted from the article]

The article analyzes why policymakers in China are willing to let the Chinese yuan decline against the U.S. dollar. It refers to China's reliance on exchange-rate stability, tighter capital controls without forgoing monetary independence and economic fundamentals as factors to its choice to devaluate the yuan. An overview of the measures imposed by China to stabilize its currency in 2015-16 that included sale of foreign exchange reserves and bank reserve requirement is provided.

(Bloomberg) -- China slashed the amount of foreign-exchange deposits banks need to set aside as reserves for the second time this year to boost the yuan after the currency hit a fresh two-year low. "The PBOC sent a strong signal to defend the yuan exchange rate", said Zhiwei Zhang, chief economist at Pinpoint Asset Management Ltd. "This action shows the PBOC is not willing to tolerate a sharp yuan depreciation against the US dollar", he said. [Extracted from the article]

The yield on a short-term deposit in dollars when placed for 3 months is 8% per annum and 7% for euros, while the six-month rate for ruble deposits is 21%, according to VTB. (Bloomberg) -- VTB Bank PJSC is offering a Chinese yuan savings account with a maximum interest rate of 8%, as the Russian lender faces strict sanctions from the U.S. and U.K. as those nations look to financially isolate Russia through widening penalties. [Extracted from the article]

"For the internationalization of the renminbi, we have said many times that it's a natural process, and our goal is not to replace the U.S. dollar or other international currencies", People's Bank of China Deputy Governor Li Bo said Sunday. (Bloomberg) -- China's goal for internationalizing its currency is not to replace the dollar, and the efforts to create a digital yuan are aimed at domestic use, a senior central bank official said Sunday. [Extracted from the article]

The article argues that China will not revalue its exchange rate. In the wake of the Asian financial meltdown, experts predicted that China would devalue the renminbi. The title of my September 6, 1999 column, "Why China Won't Devalue," indicated my contrary call. And the right call it was. Led by the U.S., a chorus of countries is loudly demanding that China ratchet up the value of its currency against the dollar. Such a revaluation is intended to make Chinese exports more expensive and less competitive. The Chinese authorities refuse to alter the long-standing renminbi/dollar rate. In their eyes a fixed exchange rate, economic growth and stability are all tightly linked together. According to Nobelist Robert Mundell, a renminbi appreciation would cut foreign direct investment, cut China's growth rate, delay convertibility, increase bad loans, increase unemployment, cause deflation distress in rural areas, destabilize Southeast Asia, reward speculators, set in motion more revaluation pressures, weaken the external role of the renminbi and undermine China's compliance with World Trade Organization rules. On October 28, 2004 Beijing announced the establishment of the Mundell International University of Entrepreneurship.

The Fed is working hard to cheapen the dollar, specifically against the yuan. Here's how to make the Chinese currency work for you. The Federal Reserve Board is working to raise the inflation rate while the U.S. Treasury is trying to talk down the dollar exchange rate. Not every day does the world's hegemonic power pursue a policy of currency debasement. Still less frequently does it have the courtesy to tell its creditors what it's doing to them. To judge by the summertime spike in yields, the bond market is absorbing the message. On the evidence of the relatively stable U.S. dollar exchange rate, the currency markets are denying it. However, the currency markets are not so much in denial as they are under a thumb. In the short run the relationship between the dollar and the Japanese yen, and the dollar and the Chinese yuan (to pick just two Asian currency-dollar exchange rates) are influenced, if not controlled, by governments. And what the arithmetic will decide, I believe, is that the dollar will cheapen, particularly against the Chinese yuan, fixed for the past nine years at 8.28 or so to the greenback. The story of the yuan is the story of the jury-rigged, lopsided international monetary system--therefore, the story of the dollar.

The article examines the vulnerability of currencies after China fixed the onshore yuan below 7 per dollar. Topics discussed include the correlation between the yuan-dollar rate in the offshore market and the currencies of the developing economies according to Bloomberg's Netty Ismail, the impressive performance of the Thai baht, and the preparation of the South African government to issue a record amount of bonds at a weekly auction.

The article reports that the People's Bank of China (PBOC) has set the yuan reference rate for onshore trading stronger than 6.9 per U.S. dollar which indicates that China is aiming for stability of the currency instead of devaluing it in response to additional tariffs introduced by U.S. President Donald Trump in their escalating trade dispute. Topics covered include reluctance of PBOC to continue the depreciation of the yuan in line with the upcoming 70th anniversary of the country's founding.

The article discusses proposals for the revaluation of the Chinese renminbi. Politicians in the U.S. and Japan are blaming the low value of the Chinese currency for all manner of economic problems in their countries and are pressing for its upward revaluation. Over the past months, China has become under intense scrutiny because of its undervalued currency. The build-up of international pressure for the revaluation of the renmibi can be attributed to U.S. Treasury Secretary John Snow. Snow suggested that the Chinese should consider their exchange rate regime and make it more flexible. He pointed to the surge in China's foreign exchange reserves as evidence that the currency is being kept artificially low. U.S. Federal Reserve chairman Alan Greenspan fanned the flames further when he argued that China should not be able to keep the renminbi constant at 28 to the dollar indefinitely. In addition, commentators in the U.S. highlight the fact that the U.S. trade deficit with China is as high as $103 billion and increasing by 25% a year. Furthermore, while the Japanese are being particularly vocal in suggesting that the undervalued renminbi is consuming Japanese jobs and pushing it into deflation, its own companies have experienced growth rates in China as high as 20%.

Two Chinese policy banks have issued dollar-denominated bonds onshore after a long hiatus, as the renminbi exchange rate continues to strengthen and foreign currency deposits in China hit a record high. [ABSTRACT FROM AUTHOR]

That's stronger than the currency was trading for on the streets of Ho Chi Minh City, where Foreign Exchange Dealing Agency No. 2 in the central business district was selling dong at 22,690 in afternoon trading and buying at 22,660. "We are looking for 2 percent depreciation in the dong against the dollar in 2016; this is partly due to a weaker yuan", Ju Wang, senior Asian foreign-exchange analyst at HSBC Holdings Plc in Hong Kong, said Monday. [Extracted from the article]

IMF staff recommend including yuan in SDR basket, Lagarde says IMF staff said in the report to the board earlier this year that the yuan trails its global counterparts in major benchmarks, such as its use in official reserves, debt holdings and currency trading. [Extracted from the article]

The article focuses on Beijing, China's decision to allow its currency to appreciate by two percent, as part of a process to have its foreign exchange system move toward a currency-basket valuation. This appreciation of the Yuan is expected to contribute to a slight falloff in Chinese exports and a subsequent increase in the products imported from China's competitors. On the other hand, due to the strong likelihood of an upward trend in the Yuan's value over the long term, it is expected that investment capital will flow into China in the short term. From the standpoint of the global market, the Yuan's appreciation represents just one of several ongoing changes in international financial markets.

The article discusses China's yuan. Three weeks after China abandoned its decade-old peg to the dollar and moved to a managed float of the yuan against a basket of currencies, Zhou Xiaochuan, governor of the People's Bank of China, revealed which currencies the basket contains. However, China's openness has limits: it is keeping to itself the weights attached to each currency. Zhou said that the dollar, the yen, the euro and the South Korean won have the biggest weights, but the basket also includes the currencies of Singapore, Britain, Malaysia, Russia, Australia, Thailand and Canada. The Hong Kong and Taiwanese dollars are conspicuously absent. Even so, the basket is much broader than expected. Most analysts had bet on only the dollar, the yen and the euro. The choice of currencies, said Zhou, depended not only on the pattern of China's trade but also on the sources of its foreign direct investment and the currency composition of its debt. It is still unclear how the system will actually operate. In theory, if the dollar falls against the other currencies, the People's Bank of China should let the yuan rise against the dollar in order to hold the overall value of the basket steady.

Explains why China should revalue its currency, the renminbi (RMB). Benefits to China of moving to a floating exchange rate and an open capital account; Exchange rate policy of China; Accumulation of dollar reserves by China; Association of a stronger yuan with a higher standard of living.

Discusses the role of China's currency, the renminbi (RMB), as a stabilizer of the world economy. Call for the revaluation of RMB; Stability of RMB foreign exchange rate; Economic status of China; Current account deficit of the U.S. with Asia.

The article focuses on China's currency. The combination of rising political pressure from America and technical adjustments to China's foreign-exchange trading system has convinced investors that the Chinese authorities are about to end the yuan's decade-old peg at around 8.28 to the dollar. In fact, diplomatic niceties matter less to the Chinese authorities than does national pride. They do not want to be seen to bow to foreign pressure about the yuan, and are loth to reward speculators. Both factors suggest that China will try to move when markets and foreign governments least expect it. In any case, any shift in the yuan's peg may prove underwhelming. Though details differ, most economists reckon China has three broad options. On balance, incrementalism is likely to win out. That implies that the eventual change will be less monumental for the world economy than many expect. Further, a small Chinese revaluation would have virtually no impact on America's vast external deficit. More uncertain is how a Chinese currency shift would affect asset prices, particularly of American bonds.

Focuses on predictions that the Hong Kong dollar will abandon its long-held peg to the United States dollar. Consistency of the exchange rate between U.S. and Hong Kong dollars; Discussion of the strength of China's yuan and its relationship to the Hong Kong dollar; Argument that abandoning the peg would undermine Hong Kong's independence.

The article looks at how China's revaluation of the yuan has affected other Asian currencies. China competes with most of the countries in the region, and its maintenance of a fixed exchange rate with the American dollar had helped to justify similar systems in Malaysia and Hong Kong. But so far the knock-on effects from China's currency adjustment have been modest. With the exception of Hong Kong, Malaysia and Singapore, most countries already had flexible exchange rates. Malaysia took advantage of China's move to scrap its own currency peg. To the extent that the revaluation promotes China's stability and demonstrates its improving macro-economic management, it opens the door a crack to what Tim Condon, chief economist at ING Financial Markets, calls "the endgame" for the Hong Kong dollar: an eventual currency union with China.

Reports on the management of the Chinese yuan by its government. Measurement of the value of the currency; Role of the People's Bank of China in maintaining the stability of the yuan exchange rate; Concern over the vague system of China in managing the currency.

Focuses on the decision of the People's Bank of China (PBOC) to abandon the dollar peg of yuan on July 21, 2005. Shift of the PBOC for a managed floating exchange rate regime based on a basket of currencies; Impact of the shift on Chinese trade; Benefits of the shift to basket of currencies for China.