Latest news with #RMBs
Business Standard
4 days ago
- Business
- Business Standard
PBOC chief calls for multi-polar currency system; promotes digital yuan
Central Bank of China head, Pan Gongsheng, speaking at China's main financial forum in Shanghai, said that a multipolar international monetary system can prompt sovereign currency issuers to strengthen policy constraints, enhance the resilience of international monetary system, and more effectively safeguard global economic and financial stability. He spoke on how the necessity to weaken the excessive reliance on a single sovereign currency and its negative impacts, foster healthy competition among a few strong sovereign currencies, and put in place incentive-restraint mechanisms. Pan also pointed to European Central Bank President Christine Lagarde's recent comments on the uncertainty of U.S. dollar dominance. Lagarde, President of the European Central Bank (ECB), noted in her recent speech that the global order based on multilateral cooperation is fracturing, with uncertainty about the dominant role of the U.S. dollar, and the changing landscape could open the door for the euro to play a greater international role. PBOC Governor Pan warned that the international currency, if dominated by the sovereign currency of a single country, has inherent instabilities. Over the past decade, the driving forces behind the shifts in the international monetary system stemmed primarily from the economic and financial dimensions in the wake of the global financial crisis, and hence the discussions were centered on economic and financial developments, he stated. He also talked about the steady rise of the RMBs international status after the global financial crisis in 2008. The RMB has already become the worlds second largest trade finance currency. Calculated on a comprehensive basis, the RMB has become the worlds third largest payment currency. Besides, the weight of the RMB in the International Monetary Funds Special Drawing Rights (SDRs) currency basket ranks third. Going forward, the international monetary system is likely to continue its evolution towards a system where a few sovereign currencies coexist and compete with checks and balances. Be it a single sovereign currency or a small group of sovereign currencies serving as the global dominant currency, the sovereign currency issuers should assume their responsibilities by strengthening domestic fiscal discipline and financial regulation, and advancing the structural reform of the economy, Pan noted. He also spoke about the problems faced by the traditional cross-border payment system and growing calls for improving it. After over a decade of construction and development, China has basically established a cross-border RMB payment and clearing network featuring multiple channels and wide coverage, the PBOC governor said.
Yahoo
16-04-2025
- Business
- Yahoo
US Treasury secretary: no risk of China weaponizing Treasuries despite bond market volatility
(Reuters) - U.S. Treasury Secretary Scott Bessent in an interview with Yahoo Finance on Tuesday dismissed concerns over China weaponizing its Treasuries despite bond market volatility and added there was no risk of China potentially using its robust Treasury pile to inflict economic pain on the United States. "If Treasuries hit a certain level or if the Federal Reserve believed that a foreign — I won't call them an adversary — but a foreign rival were weaponizing the U.S. government bond market or attempting to destabilize it for political gain, I am sure that we would do something in conjunction with each other, but we just haven't seen that," Bessent said. "We have a big tool kit." China is the second-biggest foreign holder of U.S. government debt after Japan, holding almost $761 billion of bonds in January. "If they (China) sell Treasuries, then they would have to buy RMBs, and it would strengthen their currency. And they've been doing just the opposite," Bessent said, adding that it is not in China's best economic interests to sell. U.S. President Donald Trump has slapped tariffs of 145% on Chinese goods this year as part of broader reciprocal duties on all U.S. trading partners. That prompted ridicule and criticism from Beijing, which retaliated by jacking up levies on U.S. goods to 125%. Beijing has called Trump's tariffs strategy "a joke," which irritated Bessent. "These are not a joke. I mean these are big numbers," Bessent has previously said in a Bloomberg Television interview. Any U.S.-China negotiations would have to come from "the top," involving Trump and Chinese President Xi Jinping, Bessent added.
Reuters
15-04-2025
- Business
- Reuters
US Treasury secretary: no risk of China weaponizing Treasuries despite bond market volatility
April 15 (Reuters) - U.S. Treasury Secretary Scott Bessent in an interview with Yahoo Finance on Tuesday dismissed concerns over China weaponizing its Treasuries despite bond market volatility and added there was no risk of China potentially using its robust Treasury pile to inflict economic pain on the United States. "If Treasuries hit a certain level or if the Federal Reserve believed that a foreign — I won't call them an adversary — but a foreign rival were weaponizing the U.S. government bond market or attempting to destabilize it for political gain, I am sure that we would do something in conjunction with each other, but we just haven't seen that," Bessent said. "We have a big tool kit." China is the second-biggest foreign holder of U.S. government debt after Japan, holding almost $761 billion of bonds in January. "If they (China) sell Treasuries, then they would have to buy RMBs, and it would strengthen their currency. And they've been doing just the opposite," Bessent said, adding that it is not in China's best economic interests to sell. U.S. President Donald Trump has slapped tariffs of 145% on Chinese goods this year as part of broader reciprocal duties on all U.S. trading partners. That prompted ridicule and criticism from Beijing, which retaliated by jacking up levies on U.S. goods to 125%. Beijing has called Trump's tariffs strategy " a joke," which irritated Bessent. "These are not a joke. I mean these are big numbers," Bessent has previously said in a Bloomberg Television interview. Any U.S.-China negotiations would have to come from "the top," involving Trump and Chinese President Xi Jinping, Bessent added.
Yahoo
15-04-2025
- Business
- Yahoo
Treasury Secretary Scott Bessent to Yahoo Finance: China hasn't weaponized Treasurys despite bond market volatility
Fresh bond market volatility stemming from the Trump administration's fast-moving tariff policies isn't lost on US Treasury Secretary Scott Bessent. And neither is the risk of China potentially using its robust Treasury pile to inflict economic pain on the US. "We have a big toolkit. We do buybacks. I think if Treasurys hit a certain level or if the Federal Reserve believed that a foreign — I won't call them an adversary — but a foreign rival were weaponizing the US government bond market or attempting to destabilize it for political gain, I am sure that we would do something in conjunction with each other, but we just haven't seen that," Bessent told Yahoo Finance on Tuesday in an exclusive interview. While much attention has been focused on the sliding stock market this month, investing pros say it's time to shift more focus to unusual activity in the bond market. Of note is that as investors sold off stocks, bonds were unloaded as well. That's despite Treasurys often being viewed as a place of safety during stock market turbulence. The 10-year Treasury yield has risen to 4.38%, sending mortgage rates above 7%. Just last week, as tariff concerns rippled through markets, the 10-year yield advanced 50 basis points — the most in more than two decades. Read more: The latest news and updates on Trump's tariffs In mid-September 2024, the 10-year yield hit a low of about 3.62%. The moves in the bond market are sending signals the US may have trouble paying its future debts and could soon fall into a recession. Experts add that the rise in yields also expresses a lack of confidence in a good resolution to Trump's trade wars and China possibly selling Treasurys. China is the second-largest holder of the bonds. Bessent said it's not in China's best economic interests to sell. "I could burn down my house if I had an argument with my spouse, but it's not gonna do me very much. If they started selling Treasurys, they would, you know, they'd have an effect on the price," he noted. "But more importantly, they accumulate dollars, and what are they going to do with the dollars? So if they sell Treasurys, then they would have to buy RMBs, and it would strengthen their currency. And they've been doing just the opposite. They've had a weak RMB policy. So it really served no purpose for them to weaponize Treasurys." The increase in yields stems from daily uncertainty on the tariff front. On April 9, the Trump administration announced a 90-day pause on all reciprocal tariffs, except China. The tariffs on one of the US's most important trading partners now stand at 145% — a 125% reciprocal tariff and the 20% Trump previously levied. Listen: How the Trump administration is impacting wealthy investors A 10% across-the-board tax is still being applied to all imports to the US. The administration further refined its tariff plans on April 11. The White House issued a rule that spared smartphones, computers, semiconductors, and other electronics from reciprocal tariffs — especially the harsher tariffs on Chinese goods. US Customs and Border Protection said the goods would be excluded from Trump's 10% global tariff and the 125% reciprocal Chinese tariffs. Trump quickly downplayed he was reversing course on tariffs, noting Chinese electronics will still get hit. "There was no Tariff 'exception,'" Trump said in a social media post on Sunday. "These products are subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff 'bucket.'" Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email Sign in to access your portfolio
