Newswire

From September 2010 the OMFIF Newswire was integrated into the bi weekly OMFIF Commentary and complimented in late December 2010 by the OMFIF blog.

China takes more baby steps toward currency convertibility

China continued to set the traces for further convertibility of its currency by reportedly selling renminbi-denominated bonds to central banks in Malaysia and other Asian countries.

The report this week in the Financial Times of a transaction with Bank Negara Malaysia and other unnamed Asian central banks comes after China last month authorised central banks to begin trading in the country’s domestic interbank bond market.

The moves, characterised as baby steps at this stage, come as US officials once again begin their so-far ineffectual campaign to force China to revalue its currency. Chinese officials once again are shrugging off these complaints as they pursue their own objective of positioning the renminbi as an alternative reserve currency.

Neither BNM nor the People’s Bank of China would confirm the Malaysian purchase, but markets willingly accepted the report as being in line with China’s stated objectives.

The Chinese central bank reported a huge increase in renminbi trade settlement volumes for the first half of 2010, with volumes surging to more than Rmb70bn ($10.4bn) from just under Rmb4bn ($596.6m) in the second half of 2009.

No one expects China to open the floodgates anytime soon as it maintains close control of its capital accounts, but the recent assertive moves demonstrate Beijing’s determination to follow its own agenda and ignore any sabre-rattling from Washington.

Hong Kong Stock Exchange chief executive Charles Li said this week that the renminbi could become a currency of trade in as little as five years, but is likely to become a reserve currency only after 20 years. Li penned an article on the stock exchange website with his views because internationalisation of the Chinese currency has become one of Hong Kong’s ‘hottest topics’.

 

Issue Articles

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Issue No: 32 - 22 September 2010

Issue Select: 22 Sep 201015 Sep 201008 Sep 201025 Aug 201011 Aug 201028 Jul 201014 Jul 201030 Jun 201023 Jun 201016 Jun 201009 Jun 201002 Jun 201026 May 201019 May 201012 May 201005 May 201028 Apr 201021 Apr 201014 Apr 201007 Apr 201031 Mar 201024 Mar 201017 Mar 201010 Mar 201003 Mar 201024 Feb 201017 Feb 201010 Feb 201003 Feb 201027 Jan 201020 Jan 201013 Jan 2010

Revolving door still open between Washington and Wall Street

For all the rhetoric against Wall Street emanating from Washington, the door remains open for bankers to take top government posts.

China takes more baby steps toward currency convertibility

China continued to set the traces for further convertibility of its currency by reportedly selling renminbi-denominated bonds to central banks in Malaysia and other Asian countries.

Libyan sovereign fund stake leads to Profumo ouster at UniCredit

A 2.6% stake in UniCredit held by Libya’s sovereign fund became the wedge used by political opponents to oust chief executive Alessandro Profumo.

Probe results won't end ‘flash crash’ debate

US regulators investigating the ‘flash crash’ that sent stock prices plunging last May have determined that no individual deliberately tried to disrupt the market.

UK city explores asset sales to Middle East sovereign funds

The UK’s second-largest city, Birmingham, has reportedly been in talks with sovereign funds in Abu Dhabi and other Middle Eastern countries about a possible sale of its airport and other city assets.