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☆ Exclusive: Chinese exporters using currency swaps to retain dollars as yuan sags
▼ + stars: | 2023-08-31 | by ( ) www.reuters.com time to read: +5 min

The swaps allow exporters to place their dollars with banks and get yuan instead, but through a contract that will eventually reverse the flows and give them back their dollars. However, while they remove a much-needed source of dollar supplies into spot yuan markets, analysts reckon Chinese monetary authorities can't really force exporters to convert dollars. When exporters swap higher-yielding dollars for the cheaper yuan for even 3 months, they get local currency for business needs and also earn a pick-up of an annualised 3.5% on the swap deal. "By trading FX swaps, exporters can postpone their settlements while meeting their yuan demand," said Becky Liu, head of China macro strategy at Standard Chartered Bank. Exporters' swaps, meanwhile, give state banks a pile of dollars to use in their yuan operations, in which they can undertake swaps to acquire the dollars from the onshore forwards market and sell them in the spot market to stem fast yuan declines.

Persons: Dado Ruvic, Ding, Gary Ng, Becky Liu, Jindong Zhang, Winni Zhou, Tom Westbrook, Vidya Ranganathan, Kim Coghill Organizations: REUTERS, Rights, U.S, Federal Reserve, Asia Pacific, Traders, Administration of Foreign Exchange, Standard Chartered Bank, China Merchants Bank, Thomson Locations: Rights SHANGHAI, SINGAPORE, U.S, Shanghai, China, Natixis, Singapore

The People's Bank of China, which typically issues guidance on dollar deposit rates to state banks, did not immediately comment on the matter. The lenders - Industrial and Commercial Bank of China (601398.SS), , Bank of China (601988.SS), , Agricultural Bank of China (601288.SS), , China Construction Bank (601939.SS), and Bank of Communications (601328.SS), - did not immediately respond to requests for comment. The lower rates could both discourage households from putting savings into higher-yielding dollar deposits and nudge Chinese firms, especially exporters, to settle foreign exchange receipts in yuan. The latest cut in dollar deposit rates was the second in barely a month. Some currency traders also said the cuts in dollar deposit rates would ease pressure on commercial lenders' net interest margin, as banks' dollar deposit rates had risen above lending rates before the recent adjustments.

Persons: Ken Cheung, Banks, PBOC, Winni Zhou, Samuel Shen, Jindong Zhang, Rong Ma, Ryan Woo, John Geddie, Edmund Klamann Organizations: People's Bank of China, Industrial, Commercial Bank of China, Bank of China, Agricultural Bank of China, China Construction Bank, Bank of Communications, Traders, U.S, Mizuho Bank, Reuters, Thomson Locations: SHANGHAI, BEIJING, China, United States, China's, Shanghai, Beijing, Tokyo

☆ Yuan overtakes dollar to become most-used currency in China's cross-border transactions
▼ + stars: | 2023-04-26 | by ( ) www.reuters.com time to read: +1 min

SHANGHAI, April 26 (Reuters) - The yuan became the most widely-used currency for cross-border transactions in China in March, overtaking the dollar for the first time, official data showed, reflecting efforts by Beijing to internationalise use of the yuan. The yuan was used in 48.4% of all cross-border transactions, Reuters calculated, while the dollar's share declined to 46.7% from 48.6% a month earlier. The volume of cross-border transactions covers both the current and capital accounts. China has long been promoting the use of yuan to settle cross-border trades as part of an efforts to internationalise the use of its currency. Data from SWIFT showed that the yuan's share of global currency transactions for trade finance rose to 4.5% in March, while the dollar accounted for 83.71%.

☆ China's 'great migration' kicks-off under shadow of COVID
▼ + stars: | 2023-01-07 | by ( Casey Hall | ) www.reuters.com time to read: +6 min

BORDER REOPENINGSunday marks the reopening of China's border with Hong Kong and the end of China's requirement for inbound international travellers to quarantine. More than a dozen countries are now demanding COVID tests from Chinese travellers, as the World Health Organisation said China's official virus data underreported the true extent of its outbreak. In Shanghai, for example, the city government on Friday announced an end to free PCR tests for residents from Jan. 8. China has relied on nine domestically-developed COVID vaccines approved for use, including inactivated vaccines, but none have been adapted to target the highly-transmissible Omicron variant and its offshoots currently in circulation. China reported three new COVID deaths in the mainland for Friday, bringing its official virus death toll to 5,267, one of the lowest in the world.

[1/5] People wait to purchase medicine at a pharmacy, amid the coronavirus disease (COVID-19) outbreak, in Beijing, China December 16, 2022. REUTERS/Xiaoyu YinBEIJING/SHANGHAI, Dec 17 (Reuters) - Funeral homes across China's COVID-hit capital Beijing, a city of 22 million, scrambled on Saturday to keep up with calls for funeral and cremation services as workers and drivers testing positive for the novel coronavirus called in sick. In Beijing, which has yet to report any COVID deaths since the policies changed on Dec. 7, sick workers have hit the staffing of services from restaurants and courier firms to its roughly one dozen funeral parlours. "We've fewer cars and workers now," a staffer at Miyun Funeral Home told Reuters, adding that there was a mounting backlog of demand for cremation services. China's health authority last reported COVID deaths on Dec. 3, in Shandong and Sichuan provinces.

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