OctaFX | OctaFX Forex Broker
Open trading account

China: Yuan is all-time close to SDR basket - BBH

FXStreet (Delhi) – Research Team at BBH, note that there is growing conviction that the yuan will get the nod by the IMF to join the SDR basket next month.

Key Quotes

“Recent reports, which refer to Chinese sources, say that the government is already preparing a statement on the acceptance. The IMF has a formal meeting in November when it is expected to deliberate on the issue.”

“Becoming an established “reserve currency” could certainly have benefits in terms of capital inflows – some estimates put potential demand for the yuan at $500 bln over the coming years.”

“But the greater political implications are probably most important for the Chinese leadership as it seeks to further integrate the country into the global financial system and, of course, exert influence over it.”

“In practice, there has been a flurry of recent developments that will change how the currency will be traded and thought of in the future. This includes the launching of its own cross-border payment system for the yuan (CIPS), the decision to start reporting the composition for its FX reserves for the IMF’s Special Data Dissemination Standards, the issue of a note by the PBOC in London, and plans to extend the hours of its onshore yuan trading to overlap with Europe. Full convertibility, however, is unlikely in the foreseeable future.”

FOMC: Wait till December for lift-off - Rabobank

Stefan Koopman, Research Assistant at Rabobank, suggests that today FOMC is not expected to announce a rate hike but is likely to prefer to wait until December to make a decision whether to go ahead with a 2015 lift-off.
Read more Previous

ECB has tools to ensure price stability – ECB’s Praet

The European Central Bank (ECB) chief economist Peter Praet was on the wires stating again that the bank has more tools (deposit rate cut, more QE) to ensure price stability.
Read more Next
Start livechat