Argentina sell renminbi to buy dollars?Have any
impact on China?
Yesterday in the article "the original 丨? Why do you choose to raise
interest rates by the federal reserve, China's impact on the world?"We analyzed the fed to raise interest rates and raising interest rates in the world, the influence of China, responded enthusiastically.In this paper, we interpret, though, the fed to raise interest rates to China's influence is not big, but for Asian countries such as India, Vietnam, the Middle East countries, the Latin American countries will be affected.
Soon, Argentina's response.After the fed announced increases in interest rates, Argentina's new President down to 17, announced late
cancellation of exchange controls, news, Argentina peso (ARS) fell, days after the biggest drop as much as 41%.
In view of the critical fall Argentine pesos, many comrades from the question.Among these questions, there is a is the opportunity to discuss, let more people know the concept of some people may misunderstand. Comrade message:
For so many years, always think hao elder brother is the international the situation is resolved first.About capital, financial the temperature slightly less.Take a fact:
Argentina's government announced on Wednesday that cancel lasted for four years of capital controls, allowed to float freely, but not released controls cancel after the official exchange rate.At the same time, the Argentine central bank will also $3.1 billion reserve assets for the yuan to the dollar, in order to get a better liquidity.
The original and Chinese currency swap countries have laid the abacus, used for the yuan to the dollar, after the substantial depreciation of the renminbi, change back to China, one to earn a lot of, who is the next to sell renminbi?
The internationalisation of the renminbi and recognition is not A yesterday, still have A long way to go, recently I'm not too optimistic about the development of emerging economies, including China, the Internet seems to be tall, leave the entity is nothing, but now the worst
of the real economy in our country can be said to be the worst since the founding of the people and the short-term don't see any better, this is not disorderly speak, I research A lot of production, secundiparity, tertiary industry specific enterprise, it is also very much, I do not expect A shares of the most important reason.
First of all, do not recognise the comrades of hao is so-called the situation is resolving the first person to say, the so-called article without first wu second, can only say that parsing half-decent, at least the superlatives.Is recognized, however, comrades criticisms, comments of Howe does still underdeveloped, still need to strive for perfection, the pursuit of progress, of hao will make unremitting efforts for it. Of hao is underdeveloped, but for some simple questions still can be more professional solutions, parsing.
Let's say Argentina why cancelled immediately after the fed confirmed rate exchange controls, and let the peso plunged 41% on the day. Actually, Argentina has an answer, when announced the cancellation of foreign exchange control will be conducive to enhance the profit of import and export trade, attracting foreign investment, promoting employment, reply the normal financial market order and increase the international market and investors for Argentina's economic confidence. What do you mean Argentina?Simple to understand, through the sudden
devaluation, locked immediately want to flee the capital in the country, make them unable to flee.Then, the substantial depreciation of money due to exchange rate, Argentina's commodity prices and property prices would seem to be very low, so it can boost exports and attract foreign investment, can stabilize the real economy.Hold the entity economy, financial market order is restored.This is the government immediately announced that the removal of the root cause of exchange controls and internal logic.
So, the Argentina why $3.1 billion yuan reserves into dollars? In fact, this is for the future in Argentina Argentina think reasonable position keeping peso capital reserves.Namely, sometime in the future, Argentina can according to need to sell dollars to buy pesos in the financial market, in order to stabilize to Argentina peso currency against the dollar.Do this reason is simple, is to avoid the peso has no lower limit value, if the depreciation too fast and too much, can cause the collapse of Argentina's currency, which can lead to economic collapse.In order to avoid the peso against the us dollar to crash, you must reserve enough dollars, in order to hold the peso in the right position.Peso against the yuan without such pressure, so at this moment need more dollars rather than yuan of Argentina.But Argentina's hand without so many dollars, so I want to take the dollars RMB in the international market. Argentina which come of the renminbi?Was originally held by the foreign
exchange reserves or currency swaps with China's central bank receive?The fact true as the fellow said, Argentina is in renminbi, and then make money out of China?
In fact, is clearly misunderstood.The comrades from some online "tripods cat economists" there to absorb some of the "toxic" knowledge, the fool themselves.Is a misunderstanding, the reason is not clear in what is the swap.So, we have to talk about currency swap here.
What is the swap?
Alleged currency swaps, it is agreed and signed between the two countries a corresponding amount of currency swap agreement, this agreement both parties do not make any currency swap, just a swap agreement and lines.
So, when a swap?
When a party to the other country's currency, the demand to the supply of central Banks to borrow each other's sovereign currency, borrow one to lend the party central Banks pay interest, namely: according to the agreed rate, using money party to pay interest, using the money supply of the corresponding properties similar to loan.In addition, it should be pointed out that, on both sides of the currency swap agreement, the two sides exchange currency is how much, also came back exchange rate and how much, currency swap agreement rate is fixed, not floating instant exchange rate, currency swap has nothing to do with the market price of
the currency fluctuations, is not affected by the real-time exchange rate volatility, there is no so-called exchange loss.
According to xi always visit to Argentina in July 2014 the two sides reached a three-year, 70 billion or 70 billion Argentina peso currency swap agreement, the two sides of the currency swap of 6-7% annual interest.According to the latest reports, Argentina Shibor interest rate to rise to 400 basis points need to be paid for the transaction costs, now Shibor one-year interest rate 3.35%;6 months is 3.2%.What does this mean?That is to say, Argentina to China at a little more than 7% at an annual rate or X interest, in order to agree the good with the peso exchange rate in China's $3.1 billion yuan.If the money is used for a year, Argentina need to pay the interest of more than $200 million. For this problem, many of the so-called professional learning economy, reviews the people didn't understand, in the first half of this year have prominent commentators and economists in weibo for this have been a joke, blindly, at that time of hao (WeChat ID: hao) in weibo, pointed out the mistake.Fellow comrades meet again what so-called "professionals" said China for currency swap lost money, can use this to hit back at him, this is real, according to the can depend on.Similar joke also, China's $100 per barrel at a fixed price for Russian oil, are some of the so-called "three feet cat" kung fu study economic give out (oil and gas phase is according to the real-time futures prices have a calculation formula of all
resources in the world most of them are calculated at this price, I only see the settlement due to Japan, South Korea rule of iron ore market and the three mines agreed price, because China have no initiative in late to eat a lot of losses. Later, the negotiation price system is breaking down in advance.).
So, $3.1 billion currency swap, Argentina and China is how to operate?And impact?This is a very interesting topic.
Argentina won a $3.1 billion program is like this, with $3.1 billion of Argentine pesos, currency exchange of China's $3.1 billion yuan, according to an agreement and then in the offshore yuan market sell renminbi to buy dollars.The program can be summarized as follows: $3.1 billion peso - $3.1 billion - 3.1 billion of the yuan to the dollar. That said, why not directly rather than paying to buy dollars with pesos a "two-way merchants" yuan a hand?The reason is that the currency swap rate is fixed, there is no exchange risk.Risk control not only, also need not selling pesos on pesos in the spot market prices, to avoid exchange rate is out of control.Bluntly, is that these pesos to "lock up" of the people's bank of China, not in the open market for sale, does not affect the peso spot prices, no currency risk at the same time, Argentina would pay 7% annual interest rate for this through a RMB.And, a yuan, equivalent to RMB do guarantee.For China, that if a change in one year, it made more than two dollars.
After obtaining the Argentina, sold to the international market can have the effect of "smashing dish" RMB, the yuan will accelerate nature also fell., of course, the fall is controllable, because behind have a has $3.5 trillion in foreign exchange of the people's bank of China, now in the market that the renminbi, the people's bank of China they like journey to the west of the town yuanta fairy accept tang's monk pig eight quit so simple, as long as the need to want to let the yuan rise of the people's bank of China can let its inflation, because of the deep pockets, it's like treasure can buy vanke stock, want to let it harden to harden. China needs now is, of course, the yuan against the dollar to fall, fell on the one hand, can be before the rise of the central bank balance sheets of paper losses to repair back, on the other hand can boost exports, attract investment, benefit a lot.There are, of course, the yuan can't depreciate, because the goal is the international reserve currency, must be down to the target position control is good, a good expectation to the international market.In this regard, China's central bank should be studied is ready.
For China, is for Argentina's $3.1 billion yuan, Argentina came to selling in the international market, this is equivalent to the people's bank of China issued $3.1 billion RMB currency in the world.The money has not only let the people's bank of China to earn interest, also is equivalent to nothing local money, future Argentina to also come back to get the
international market to buy back the RMB, were once besides Argentina to pay interest, is the seigniorage.At the same time, help promote or the internationalisation of the renminbi in China.
Argentina with this model, if other countries don't stay up, can help them in the capital of the people's bank of China, who make more money of the people's bank of China "mana" big?"Of course, that the capital will have to give "labor", have to help China pushed the yuan. The Chinese foreign ministry today has carried on the response to this, referred to as "the renminbi is freely usable currency, Albania choice will be part of the renminbi for dollars and other reserve currency, belongs to own arrangement Albania. China welcomes the market-oriented reform in the field of exchange rate, etc, and is willing to work with the central bank communication, to promote financial reform steadily push forward in the direction of marketization."
Please note that the ministry of foreign affairs said is "the yuan is freely usable currency", around the world are free to use?The somebody else recognition with Argentina.Argentina to recognize that other countries themselves to exhaustion, also can find China, a nation without currency swaps and China will be chasing and China make the swap.With such benefits, but also fear them not reserve currency?
RMB $can change in the world, several currencies in the world can do this?Only a handful.And, more importantly, the strength of the people's
bank of China is behind, no matter how much you sell, the people's bank of China lent, as long as there is a stable exchange rate, China can sell dollars to buy back the others throw the yuan.So, that is, China lent relevant countries through currency swaps yuan, China's central bank, then put the yuan to buy back to sell the dollar, China's central bank holdings of dollar exchange will unconsciously into other countries about China's debt.So the yuan's dollar reserves are likely to reduce, but owe the debt person in the world.Bluntly, is turned out to be americans owe China, now through this exchange, creditors in home.
Don't forget that this is a fixed exchange rate down debt, this is good than the dollar reserve.The other party if there is no money, take resources, commodity to pay it;Today is not over tomorrow also slowly, so high interest in no hurry, anyway.What is this?This is economic power as a "rich man" can obtain realistic interests.
So, Argentina borrow yuan, impact on China's four:
A, let the people's bank of China to make money.
Second, help promote the renminbi.
Third, help the people's bank of China "smashing dish" of the yuan. Fell on the yuan, xinhua news agency said English essays "fun", that is the fault of the dollar hike expectations of, has nothing to do with us, we had a lot of economic opportunity and do not have what problem.The implication is that, against the yuan down, please go to the federal