https://sg.finance.yahoo.com/news/china-state-banks-seen-selling-dollars-fx-market-034935772--business.html
China is selling USD to defend its yuan.
We've explained this previously.
https://sg-stock.blogspot.com/2018/11/the-more-us-tries-to-hurt-china-more-it.html
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2 batches were sold on Tue 13 Nov: at 9:40am and at 10:50am
But not much effect ... CNY still at around 6.95 to USD.
Still over 10% decline in the last 7 months from Apr to Nov.
Doesn't look good for negotiating with US.
USD also appreciated sharply against other major currencies & gold over the last 1 week.
I bet many Chinese citizens wished they can buy USD & Treasuries from the PBOC! LOL!
China's goal is to keep CNY below 7 for 2018 and has been successful insofar.
China has to keep CNY below USD 7 "forever", not just in 2018 --- otherwise all hell will break loose in China (and most of Asia including S'pore too) ;)
China spent US$1T of its reserves in 2015 trying to support the yuan --- that's almost 3 years' worth of S'pore GDP.
So far in 2018, they are trying not to follow 2015. Beijing has spent about US$100B so far.
The fact that it has to sell USD & use up part of its reserves to support the yuan already show some weakness to the world.
Compare with SGD --- MAS probably has to keep on buying USD & EUR & JPY in order to push down SGD! LOL!
SGD is pegged to a basket of currencies and it is impossible to buy other currencies to depress SGD as our reserves are not as big as China's.
MAS just needs to adjust the width and slope of the policy band to stop SGD from depreciation.
https://www.channelnewsasia.com/news/singapore/mas-allow-singdollar-rise-slightly-monetary-policy-singapore-10816618
China has to sell its US reserves because there is a worldwide shortage of USD now. This will pose a big problem in the US debt market because there are fewer foreign buyers now.
http://sg-stock.blogspot.com/2018/10/usd-has-supply-shortage-now.html
http://sg-stock.blogspot.com/2018/09/a-roundup-of-us-economic-situation.html
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