Digital trade in Abu Dhabi is witnessing remarkable growth, study shows
business4 hours ago
The People’s Bank of China, China’s central bank, announced Saturday that it will allow the yuan to fluctuate by up to 1.0 percent on either side of its trading band when markets open Monday.
The yuan is currently allowed to trade 0.5 percent on either side of a midpoint price set by the central bank every trading day.
The new rules came as pressures for the yuan to appreciate have eased substantially after recent data showed the country’s trade has become more balanced, analysts said.
The decision also followed data released Friday showing the world’s second-largest economy grew at its slowest pace in three years during the first quarter, a development that calls for further policy easing.
IMF chief Christine Lagarde described the move on the yuan as an “important step”.
“This underlines China’s commitment to rebalance its economy toward domestic consumption and allow market forces to play a greater role in determining the level of the exchange rate,” Lagarde said in a statement.
Beijing’s trading partners have long criticised its yuan exchange rate, saying it is kept artificially low, fuelling a flow of cheap exports that have helped trigger huge trade deficits between some countries and China.
The White House Saturday reacted cautiously to the announcement, saying it would like to see “more movement.”
“They’ve made some progress, we’d like to see more movement. We noted this announcement. We’re reviewing it closely,” a top administration advisor, Ben Rhodes, told reporters on the sidelines of a regional summit in Colombia.
“It comes in the continuum of us wanting to see the Chinese take more of these steps to see their currency appreciate to come in line with the market value,” added Rhodes, the deputy national security advisor.
Chinese Prime Minister Wen Jiabao acknowledged last month that the yuan had increased in value by some 30 percent since 2005 in comparison to the dollar.
The move to loosen the currency’s trading band could engender two-way volatility in the exchange rate, Bank of America-Merrill Lynch economist Lu Ting told Dow Jones Newswires.
“China will avoid significant appreciation or depreciation this year due to uncertain global environment and the need for stability during the year of leadership change,” Lu said of political transitions in China and the US.
Lu said his bank expects the dollar-yuan exchange rate to be at 6.2000 at the end of this year.
China’s economy grew at a lower-than-expected 8.1 percent in the first quarter, compared with 8.9 percent in the fourth quarter of 2011.
Its trade surplus has also been shrinking in recent months, China recorded a $5.35 billion trade surplus in March, reversing a $31.48 billion deficit in February.
“It’s a good time to increase the flexibility of the exchange rate (as) there hasn’t been a lot of speculative inflows due to expectations of an appreciation in the yuan,” Wang Tao, an economist at UBS, told Dow Jones Newswires.
Digital trade in Abu Dhabi is witnessing remarkable growth, study shows
business4 hours ago
Garnacho and Mainoo were two of United's bright sparks in a disappointing season in which they finished a worst-ever eighth in the Premier League era
football4 hours ago
Young adults would either choose to join military full-time for 12 months or spend one weekend every month volunteering in their community over a year
europe4 hours ago
The country's railway operator said it has cancelled trains to Georgia due to a landslide on the line
world4 hours ago
It was the third such strike on people on motorbikes in south Lebanon on Sunday
mena4 hours ago
It was the first time the 26-year-old had stood on the Monaco podium in six attempts
f15 hours ago
Country’s tourism sector contributed Dh220 billion to the gross domestic product in 2023
business5 hours ago
The region’s DCM saw a 7.0 per cent increase to $940 billion by the end of Q1 2024
business5 hours ago