Just in:
Samsung Electronics Launches 2024 Neo QLED 8K, Neo QLED, and OLED Displays to Spark the AI Screen Era // Infineon and HD Korea Shipbuilding & Offshore Engineering jointly develop ship electrification technology // Hong Kong Crypto Exchange Application Stalled by US Lawsuit // French Leaders Gather for Interfaith Iftar Dinner // Sunshine’s Debut Features Leave Tech World Scratching Its Head // 2024 Lok Sabha Elections Will Be The Costliest One Till Now In The Whole World // New Nylon Constant Torque Hinge From Southco Provides Position Control In A Compact Package // Samsung Partners National Heritage Board to Bring a Slice of Singapore’s Cultural Heritage to Samsung The Frame TV // U.S. Compliance Takes Center Stage at OKX Following Industry Jitters // TUMI Hosts Global Launch Event in Singapore to Unveil Women’s Asra Collection and Announce Global Ambassador, Mun Ka Young // Simplified Business Moves for Al Reem Island Firms // Experience Ultimate Shopping Freedom at 4.4 Shopee Spree: Don’t Worry, Shop Shopee! // CABSAT 2024 Ushers in 30 Years of Media Innovation // Digital Hub Unveiled: Xposure Launches Platform for Global Photography Community // First-Ever Fortune Innovation Forum Draws Top Global Leaders to Hong Kong, Promoting Agendas On Collective Cross-Sector Advancement // Saudi Arabia Unveils Green Financing Tool to Achieve Net-Zero Goals // Andertoons by Mark Anderson for Fri, 29 Mar 2024 // Universal Language for Healthcare: General Authority Embraces Global Coding System // Global Audience to Witness Thrill of Dubai World Cup // German Job Market Resilience Bodes Well for Economic Recovery //
HomeMarketsRogue renminbi exchange rate raises eyebrows

Rogue renminbi exchange rate raises eyebrows

4fdb823c b7ee 11e6 961e a1acd97f622d

Anyone checking the exchange rate between China’s renminbi and the US dollar would have got a shock early on Tuesday when an apparent glitch resulted in quotes shown on Google and at least two other currency exchange websites showing an 8 per cent devaluation.

When markets opened, the Chinese currency instead rose against its US counterpart, after the central bank set the midpoint of the renminbi’s 4 per cent daily trading band at Rmb6.8575, 0.43 per cent stronger than Monday’s level.

ADVERTISEMENT

By mid-morning the renminbi was 0.3 per cent stronger, at Rmb6.8631 per dollar, its biggest one-day rise since August. Around midday, the currency was trading at Rmb6.8681, a gain of 0.2 per cent.

China has been gradually loosening controls on the renminbi as part of efforts to increase international use of its currency, although Beijing’s moves in recent weeks to stem a surge of capital outflows have raised questions about how far it will go towards open markets.

In August last year, the central bank made a one-off devaluation to the renminbi of 1.9 per cent as it shifted to a more market-based mechanism.

The renminbi trades in a 4 per cent band against a basket of currencies including the dollar, but the US currency is the most important reference, and the most politicised. 

“The sheer level of anticipation and interest surrounding any move, actual or rumoured, in the renminbi-dollar rate shows how that one exchange rate has become loaded with economic and geopolitical ramifications,” said Eswar Prasad, a China finance expert at Cornell University.

US president-elect Donald Trump has revived complaints that the renminbi is undervalued and is thus artificially keeping Chinese exports competitive. The exchange rate was a point of friction between the two countries about 10 years ago, but before Mr Trump’s election the issue had receded, as the Chinese currency now moves more freely around values that most analysts reckon are justified.

The Chinese currency has steadily depreciated since January 14 2014, when it hit a record high of Rmb6.0393 against the dollar. Last month it hit its lowest point since 2008, and last week China moved to staunch capital outflows, which regulators said were causing the currency to weaken.

Tuesday’s exchange rate issue was caused by a bug in Google’s system, according to a person familiar with the matter at the US company.

However, Chinese media said that other online foreign exchange providers X-rates and XE.com both at some point overnight also showed the renminbi at around 7.48 to the US dollar, before reverting to the official rate by Tuesday morning. The rogue rates fed through to exchange rates displayed by Bank of America, among others.

Data feeds directly to terminals operated by Reuters, Bloomberg and Wind Financial did not show the rogue result.

Trading in the Chinese currency is still tightly controlled. Onshore traders cannot submit bids or offers outside the trading band, making it impossible that a rogue bid in thin overnight trading — of the type that can rock metals futures — can cause a big impact.

The People’s Bank of China said it was “aware” of Tuesday’s issue but did not offer any explanation.

Twitter: @HornbyLucy

Additional reporting by Tom Mitchell and Leslie Hook

This article has been amended to reflect the fact that Donald Trump has revived complaints that the renminbi is undervalued

Source link

ADVERTISEMENT

ADVERTISEMENT
Just in:
No running of govt from jail, says Delhi Lt Governor // Universal Language for Healthcare: General Authority Embraces Global Coding System // Digital Hub Unveiled: Xposure Launches Platform for Global Photography Community // French Leaders Gather for Interfaith Iftar Dinner // Aid is at the core of Israel, Palestine struggle to control post-war Gaza // Simplified Business Moves for Al Reem Island Firms // Sharjah Chamber Breaks Ground on Final Expansion with New HQ Pact // 2024 Lok Sabha Elections Will Be The Costliest One Till Now In The Whole World // US reiterates concern over Kejriwal arrest, Cong accounts // Samsung Electronics Launches 2024 Neo QLED 8K, Neo QLED, and OLED Displays to Spark the AI Screen Era // New Nylon Constant Torque Hinge From Southco Provides Position Control In A Compact Package // Andertoons by Mark Anderson for Fri, 29 Mar 2024 // Melco Style Presents “SANRIO CHARACTERS STUDIO CITY CARNIVAL” – Explore a SANRIO World of Unlimited Love and Cuteness // Infineon and HD Korea Shipbuilding & Offshore Engineering jointly develop ship electrification technology // Samsung Partners National Heritage Board to Bring a Slice of Singapore’s Cultural Heritage to Samsung The Frame TV // U.S. Compliance Takes Center Stage at OKX Following Industry Jitters // Hong Kong Crypto Exchange Application Stalled by US Lawsuit // First-Ever Fortune Innovation Forum Draws Top Global Leaders to Hong Kong, Promoting Agendas On Collective Cross-Sector Advancement // Global Audience to Witness Thrill of Dubai World Cup // Sunshine’s Debut Features Leave Tech World Scratching Its Head //