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Sat Apr 5, 2014, 04:49 PM

 

China currency liberalization to be a 'seismic event': Australia

By Wayne Cole
SYDNEY Thu Mar 27, 2014 3:12am EDT

(Reuters)
- China realizing its ambitions to internationalize the yuan is likely to be a "seismic event" for global markets, leading to large capital flows and perhaps a new reserve currency, a top Australian central banker said on Wednesday. Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe said the process had some way to go yet but that Beijing had signaled its seriousness by last week widening the trading band for the yuan, also known as the renminbi (RMB).

"The internationalization of the RMB - and China's associated move towards a liberalized capital account and more flexible exchange-rate regime - has the potential to create a seismic shift in the international monetary and financial landscape," Lowe said in a speech to the Centre for International Finance and Regulation (CIFR) conference in Sydney.

*snip*

"Once capital controls have been removed and interest rates and the exchange rate are market determined, the structure of the RMB market - and indeed of global capital markets - will look quite different," said the report's authors, Kathleen Walsh, Geoff Weir and Barry Eichengreen. The renminbi would become one of the most widely traded global currencies, and mainland China's equity market could be the largest in the world, with a capitalization of around $30 trillion, the report said.

China's bond market could be the global No.2 behind the United States and equal to the entire euro zone. "The RMB is likely to be a significant part of central bank foreign exchange reserves and RMB government securities may well become the main alternative "safe asset" to U.S. Treasuries, with important implications for global capital flows and financial stability," it added.

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Reply China currency liberalization to be a 'seismic event': Australia (Original post)
DeSwiss Apr 2014 OP
Laelth Apr 2014 #1
DeSwiss Apr 2014 #4
Laelth Apr 2014 #7
PoliticAverse Apr 2014 #2
DeSwiss Apr 2014 #5
yurbud Apr 2014 #8
loudsue Apr 2014 #3
DeSwiss Apr 2014 #6

Response to DeSwiss (Original post)

Sat Apr 5, 2014, 05:05 PM

1. k&r for exposure. n/t

-Laelth

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Response to Laelth (Reply #1)

Sun Apr 6, 2014, 01:41 AM

4. Too many with eyes closed.

 

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Response to DeSwiss (Reply #4)

Sun Apr 6, 2014, 08:39 AM

7. This is, in fact, a BIG deal. Bonus kick. n/t

-Laelth

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Response to DeSwiss (Original post)

Sat Apr 5, 2014, 05:11 PM

2. Someday all those dollars around the world are going to start coming back home

in a rush, this will not be a good thing.

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Response to PoliticAverse (Reply #2)

Sun Apr 6, 2014, 01:44 AM

5. We can use them for heat maybe?

 

- Except they're mostly digital, so not too many calories......

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Response to PoliticAverse (Reply #2)

Mon Apr 7, 2014, 11:13 AM

8. maybe we can export more for a change if our goods are cheaper

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Response to DeSwiss (Original post)

Sat Apr 5, 2014, 05:38 PM

3. The potential repercussions...down the road...of this are, indeed seismic in scope.

The first next step to the dollar no longer being the world's standard.

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Response to loudsue (Reply #3)

Sun Apr 6, 2014, 01:47 AM

6. And predictable.

 

- Although, we don't like to listen to the [strike]CT's[/strike] prophets.

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