Showing posts with label yuan. Show all posts
Showing posts with label yuan. Show all posts

Monday, November 5, 2012

Data visualization: The People's Bank of China balance sheet

David Glasner and Scott Sumner have posts on Chinese monetary policy. They both inquire about cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 People's Bank of China (PBoC) balance sheet. I've affixed a chart of it below.

Here's a quick rundown of how cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 PBoC balance sheet changes. The PBoC sets cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 yuan-to-dollar exchange rate at some rate below what it would in a free market. Chinese exporters cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365reby enjoy a subsidy. The law requires that cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 foreign currency that exporters earn overseas be repatriated and exchanged for yuan. The PBoC prints yuan (bottom green area) or provides deposits (bottom purple area), receiving this foreign exchange in return (top green area).

(scribd pdf)

By creating such large quantities of liquid currency and reserves, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 PBoC will force cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 domestic price level  to rise. In order to prevent this inflation, cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 Bank must "sterilize", or mop up cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 liquidity it has created. It does this by issuing bonds (dark blue area at bottom) to domestic banks in exchange for currency and reserves (bottom purple and green). Thus liquid instruments are replaced by an illiquid instrument, bonds. The PBoC also forces banks to hold large quantities of required reserves (bottom purple area), which immobilizes what would ocá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365rwise be a fairly liquid instrument. In this way cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 rise in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 domestic price level can be temporarily prevented. The PBoC could also sterilize by selling domestic assets (top pink, blue, or yellow areas) and retiring cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 currency and reserves it receives. But given that domestic assets held on cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 PBoC balance sheet haven't changed much over cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 years, it's likely that different means are being found to sterilize.

Sunday, December 11, 2011

China, CNH, CNY, Hong Kong, and yuan

FT Alphaville updates cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 offshore yuan story. See Chinese CNH – YOURS!.

There seems to have been a turnaround in cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 offshore market's blistering growth and cá cược thể thao bet365_cách nạp tiền vào bet365_ đăng ký bet365 yuan's appreciation.

Relevant Links:
Offshore renminbi – an updated primer from HSBC
NDF discount reflects tighter yuan liquidity from Credit Agricole
Yuan's Rise Is Out of Steam from WSJ
Hong Kong Yuan Deposits Drop for 1st Time Since October ’09 from Bloomberg