Showing posts with label China. Show all posts
Showing posts with label China. Show all posts
Friday, October 30, 2015
Thursday, August 13, 2015
#China Seeks to Calm Markets as It Devalues Its Currency for a 3rd Consecutive Day
HONG KONG — China on Thursday sought to ease the turbulence its depreciating currency, the renminbi, has set off in global markets, even as it pushed the renminbi lower for the third day in a row.
China’s central bank, the People’s Bank of China, set the renminbi’s official exchange rate to the dollar lower by 1.1 percent on Thursday, bringing the total devaluation since Tuesday to 4.4 percent, the biggest drop in decades.
At an unusual ad hoc press conference, however, officials from the central bank were at pains to explain that the currency had not entered a free fall.
“The central bank has withdrawn from the normal mode of intervention,” Yi Gang, the deputy governor of the bank and the head of the unit that runs China’s foreign exchange system, told reporters in Beijing. “But if you say the market has commonly recognized rules of the game, then those are still the rules that we lay out.”
Mr. Yi was referring to changes to China’s currency system that were announced on Tuesday, as the bank devalued the renminbi by nearly 2 percent. It was the biggest daily drop since 1994, when China’s modern currency system began.
Previously, the central bank would assign a value to the currency each morning, and would allow it to trade up or down by a maximum of 2 percent against the dollar. In practice, it barely budged more than a fraction of percentage point each day.
Now, policy makers have said they are giving the market a bigger say by basing the official exchange rate setting on the currency’s trading performance, not just on a government decree.
Still, central bank officials made clear on Thursday that while they intended to ease their grip somewhat, they would not end it.
On Wednesday, when the renminbi showed signs of weakening by the maximum 2 percent limit, the central bank was widely reported to have jumped into the currency market, selling dollars to push up the value of the renminbi — which rapidly recovered to close only 1 percent lower.
Mr. Yi did not directly comment on any intervention when asked about it on Thursday, but hinted it was a tool still at the central bank’s disposal. “When there’s excessive volatility in the market, it can still be effectively managed,” he said.
Nytimes.com
China’s central bank, the People’s Bank of China, set the renminbi’s official exchange rate to the dollar lower by 1.1 percent on Thursday, bringing the total devaluation since Tuesday to 4.4 percent, the biggest drop in decades.
At an unusual ad hoc press conference, however, officials from the central bank were at pains to explain that the currency had not entered a free fall.
“The central bank has withdrawn from the normal mode of intervention,” Yi Gang, the deputy governor of the bank and the head of the unit that runs China’s foreign exchange system, told reporters in Beijing. “But if you say the market has commonly recognized rules of the game, then those are still the rules that we lay out.”
Mr. Yi was referring to changes to China’s currency system that were announced on Tuesday, as the bank devalued the renminbi by nearly 2 percent. It was the biggest daily drop since 1994, when China’s modern currency system began.
Previously, the central bank would assign a value to the currency each morning, and would allow it to trade up or down by a maximum of 2 percent against the dollar. In practice, it barely budged more than a fraction of percentage point each day.
Now, policy makers have said they are giving the market a bigger say by basing the official exchange rate setting on the currency’s trading performance, not just on a government decree.
Still, central bank officials made clear on Thursday that while they intended to ease their grip somewhat, they would not end it.
On Wednesday, when the renminbi showed signs of weakening by the maximum 2 percent limit, the central bank was widely reported to have jumped into the currency market, selling dollars to push up the value of the renminbi — which rapidly recovered to close only 1 percent lower.
Mr. Yi did not directly comment on any intervention when asked about it on Thursday, but hinted it was a tool still at the central bank’s disposal. “When there’s excessive volatility in the market, it can still be effectively managed,” he said.
Nytimes.com
Thursday, November 29, 2012
Thursday, October 22, 2009
China’s Economy Expands 8.9 Percent
BEIJING — As much of the world continues to claw its way out of recession, China enjoyed another stretch of robust expansion in the third quarter, growing 8.9 percent from the previous year, according to government figures released on Thursday.
The country’s faster growth was largely fueled by increased bank lending, generous government support for exports and a 4 trillion yuan, or $585 billion, stimulus package that is spurring a dizzying array of building projects.
According to the National Bureau of Statistics, the rate of expansion jumped from 7.9 in the second quarter, which would put the nation on target to reach the 8 percent target that Chinese economists say is required to maintain healthy employment and social stability.
The United States economy, by contrast, shrank by a revised 0.7 percent during the second quarter, although third-quarter figures, when released next week, are expected to show a 3.1 percent annual rate of expansion.
The indications of strong growth in China, the world’s fastest-growing major economy, exceeded the expectations of government ministers.
“Investment played an important and positive role in maintaining relatively fast growth and reversing the slowdown,” Li Xiaochao, a bureau spokesman, said in announcing the figures. He said domestic consumption contributed to about a third of the growth.
Separate economic reports showed that retail sales and industrial output rose markedly in September, helping to offset the slump in exports, a mainstay of the Chinese economy, that has continued unabated for 11 months.
Even as China celebrates its rosy fiscal health, government economists have expressed some concern that liberal lending by the state-controlled banking system, which has given out a record $1.27 trillion in new loans this year, could require some reining in. Some analysts have warned that too much of that money has ended up in the stocks and real estate, fueling a 73 percent rise in property values in the mainland this year.
Earlier this week, the State Council, China’s Cabinet, said it would place greater curbs on a number of industries, including steel, cement and glass production, essential ingredients for the ongoing construction boom that some experts say has become overheated.
By ANDREW JACOBS
The country’s faster growth was largely fueled by increased bank lending, generous government support for exports and a 4 trillion yuan, or $585 billion, stimulus package that is spurring a dizzying array of building projects.
According to the National Bureau of Statistics, the rate of expansion jumped from 7.9 in the second quarter, which would put the nation on target to reach the 8 percent target that Chinese economists say is required to maintain healthy employment and social stability.
The United States economy, by contrast, shrank by a revised 0.7 percent during the second quarter, although third-quarter figures, when released next week, are expected to show a 3.1 percent annual rate of expansion.
The indications of strong growth in China, the world’s fastest-growing major economy, exceeded the expectations of government ministers.
“Investment played an important and positive role in maintaining relatively fast growth and reversing the slowdown,” Li Xiaochao, a bureau spokesman, said in announcing the figures. He said domestic consumption contributed to about a third of the growth.
Separate economic reports showed that retail sales and industrial output rose markedly in September, helping to offset the slump in exports, a mainstay of the Chinese economy, that has continued unabated for 11 months.
Even as China celebrates its rosy fiscal health, government economists have expressed some concern that liberal lending by the state-controlled banking system, which has given out a record $1.27 trillion in new loans this year, could require some reining in. Some analysts have warned that too much of that money has ended up in the stocks and real estate, fueling a 73 percent rise in property values in the mainland this year.
Earlier this week, the State Council, China’s Cabinet, said it would place greater curbs on a number of industries, including steel, cement and glass production, essential ingredients for the ongoing construction boom that some experts say has become overheated.
By ANDREW JACOBS
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