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YUAN
BOT stresses growing role of yuan
Erich Parpart
The Nation

BANGKOK: -- The Chinese yuan is becoming more and more important in world trade, so investors are well advised to use the currency in future trade and investment to lower the risk of fluctuations, the Bank of Thailand said yesterday.

Chantavarn Sucharitakul, assistant governor for the Financial Markets Operations Group, said the use of the yuan as a trade and investment currency was noticeably increasing because of the size and growth potential of the Chinese economy and Beijing's policy to encourage the use of the yuan in world trade.

"Investors have more interest in using the yuan to trade and invest, as seen by the move of the United Kingdom, which has offered itself as the centre for trade that uses the yuan, or the Russians, who have agreed to use domestic currencies for their bilateral trade," she said.

The use of a domestic currency for transactions between countries will provide more options in trading for other regions.

There are many factors that are needed for a currency to become a proper international currency, such as its flexibility, robust cash flow within the capital market and debt in the financial market in order to keep the cost of transactions as low as possible.

Britain's decision to become the centre for trade using the yuan as a settlement currency - the yuan will be directly quoted within the China Foreign Exchange Trade System - is similar to what Australia, Malaysia, Russia and Thailand have done before.

It is also part of the Bank of Thailand's plan, since it realised the important of the yuan in the future.

"The yuan has the potential to play a bigger part in the future and the central bank has encouraged Thai operators to start using more yuan as means for trade and investment and as a tool to manage exchange risk and to reduce the effect of fluctuations from the main currency," Chantavarn said.

Source: http://www.nationmultimedia.com/business/BOT-stresses-growing-role-of-yuan-30237536.html

-- The Nation 2014-07-02

[siampolee]

There are many factors that are needed for a currency to become a proper international currency, such as its flexibility, robust cash flow within the capital market and debt in the financial market in order to keep the cost of transactions as low as possible.

Therein lies the answer.Time alone will let the financial world see how the strength and reliability the Yuan will develop and will it be able to withstand the fluctuations and turmoil of the international money market let alone the concentrated attacks of the currency manipulators.

Go slowly go carefully.

Those other established currencies out there may at times seem a trifle fragile and volatile, however those currencies have stood the test of time. A new boy on the block is indeed welcome but the ''new boy '' has got to be able to establish its banking and its currency stability and value worth.

Coming soon now no doubt, the entrance of the Indian Rupee.

Just remember that old adage ''Fools and their money are soon parted.''

[Naam]

There are many factors that are needed for a currency to become a proper international currency, such as its flexibility, robust cash flow within the capital market and debt in the financial market in order to keep the cost of transactions as low as possible.

Therein lies the answer.Time alone will let the financial world see how the strength and reliability the Yuan will develop and will it be able to withstand the fluctuations and turmoil of the international money market let alone the concentrated attacks of the currency manipulators.

Go slowly go carefully.

Those other established currencies out there may at times seem a trifle fragile and volatile, however those currencies have stood the test of time. A new boy on the block is indeed welcome but the ''new boy '' has got to be able to establish its banking and its currency stability and value worth.

Coming soon now no doubt, the entrance of the Indian Rupee.

Just remember that old adage ''Fools and their money are soon parted.''

Coming soon now no doubt, the entrance of the Indian Rupee.

for losers like the Indian Rupee it is difficult to "enter" anything outside India.

Those other established currencies out there may at times seem a trifle fragile and volatile,

whilst the non-established CNY (aka Yuan) is fluctuating and volatile as the established currencies.

[shirtless]

The American dollar is being finally deemed not for trade.Wall street has ruined the USD .

[Naam]

The American dollar is being finally deemed not for trade.Wall street has ruined the USD .

but you, me and many others would like to own huge amounts of "American Dollars", isn't it?

[kamahele]

The American dollar is being finally deemed not for trade.Wall street has ruined the USD .

Since when? Dollars are still being used all over the world not only for international trade but as legal tender in foreign countries because it is more reliable than the money printed by many nations. Wall Street has done a lot but not ruined the dollar. Not year anyway. The government has however kept the dollar artificially low for years to increase exports.

[Yann55]

I strongly recommend this book, easy to find in Thailand :

When China Rules The World

by Martin Jacques

Penguin Books, second edition, 2012

Failing to notice that this 'recommendation' by the Bank Of Thailand comes so soon after the ill-advised, haughty and patronizing comments made by Mr Kerry is being in denial of what actually goes on in this part of the world, and of how China is rapidly taking over, whether we like it or not. When the Roman empire was in decline and near its end, the Romans had the very same attitude : it's not happening.

Edited July 2, 2014 by Yann55

[rickirs]

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The American dollar is being finally deemed not for trade.Wall street has ruined the USD .

I will gladly exchange 1 baht for every 1 USD you have, no limit.

[Daniel Boon]

The American dollar is being finally deemed not for trade.Wall street has ruined the USD .

Since when? Dollars are still being used all over the world not only for international trade but as legal tender in foreign countries because it is more reliable than the money printed by many nations. Wall Street has done a lot but not ruined the dollar. Not year anyway. The government has however kept the dollar artificially low for years to increase exports.

"the government has kept the dollar artificially low" .... you are joking and if not, what ignorance; the Yuan has been devalued to prevent the USA from a) actions taken to reduce the size of its debt and pay the money it 'owes' and the ripple effect on every trusting nation sucked into the economic vortex that is the USA ... the US$ is worthless paper ... its just that nobody wants to be left holding the bag ...

[rickirs]

The problem with the yuan is its own success.

Open trading of the yuan in the international market through a floating exchange rate like the USD, Pound, and Ruble means the Chinese economy and financial system are reliant on the fickle and potentially destabilizing short-term foreign capital that its closed financial system was designed to protect against. The Chinese currency control system has fueled an annual 20% price increase in Beijing and other Chinese cities last year. China’s services-sector growth is at a five-year low as of January 2014 and its factory output is contracting.

China’s export sector has slowed to a 4% growth in December 2013 and could be set to weaken further. China's currency is interconnected to a property market that is on a precipice of oversupply at inflated prices. Inflation is occurring in consumer goods and wages. With the developing collapse of the domestic economy, China is trying to shift its currency base to higher exports, but there the yuan is overvalued. Good for Chinese tourists but bad for Chinese manufacturing. As an example, "it now costs 10% more to produce the Airbus A320 in Tianjing than it does in Toulouse, thanks to rising wages and falling productivity.." - Wall Street Journal, "China's Strong Currency Problem - Price Adjustments Look Inevitable," by Craig Stephen.

So the yuan has potential for high volitility. Without being made available in a floating currency exchange, the value of the yuan in the international market can change dramatically according to the nontransparent policies of its secretive ruling class. Meanwhile, I expect China takes comfort in its investment in US Treasury Bills.

[Naam]

The American dollar is being finally deemed not for trade.Wall street has ruined the USD .

Since when? Dollars are still being used all over the world not only for international trade but as legal tender in foreign countries because it is more reliable than the money printed by many nations. Wall Street has done a lot but not ruined the dollar. Not year anyway. The government has however kept the dollar artificially low for years to increase exports.

"the government has kept the dollar artificially low" .... you are joking and if not, what ignorance; the Yuan has been devalued to prevent the USA from a) actions taken to reduce the size of its debt and pay the money it 'owes' and the ripple effect on every trusting nation sucked into the economic vortex that is the USA ... the US$ is worthless paper ... its just that nobody wants to be left holding the bag ...

Mr. Boon, Sir... with all due respect for your deplorable macro-economic ignorance which is clearly demonstrated by each and every point you mentioned in your posting, please consider...

...the good news that i am using mainly this worthless paper since 40 years to cover living expenses, build homes, buy cars, pay for flights...

and guess what? i am not the only one!

[Naam]

As an example, "it now costs 10% more to produce the Airbus A320 in Tianjing than it does in Toulouse, thanks to rising wages and falling productivity.." - Wall Street Journal, "China's Strong Currency Problem - Price Adjustments Look Inevitable," by Craig Stephen.

another ridiculous statement originating from The Greatest Nation on Earth™ concerning China

[Asiantravel]

"Generally speaking, it is not believed by the vast majority that the American dollar will be overthrown," Dick Bove, vice president of equity research at Rafferty Capital Markets, said in a note. "But it will be, and this defrocking may occur in as short a period as five to 10 years."

Bove uses several metrics to make his point, focusing on the dollar as a percentage of total world money supply.That total has plunged from nearly 90 percent in 1952 to closer to 15 percent now. He also notes that the Chinese yuan, the yen and the euro each have a greater share of that total.

http://www.cnbc.com/id/100461159

[lvr181]

A forum full of economists? If you put all the worlds economists together in one room, no two of them would agree.

[SheungWan]

A forum full of economists?

'Er no.

[Ulic]

The American dollar is being finally deemed not for trade.Wall street has ruined the USD .

Since when? Dollars are still being used all over the world not only for international trade but as legal tender in foreign countries because it is more reliable than the money printed by many nations. Wall Street has done a lot but not ruined the dollar. Not year anyway. The government has however kept the dollar artificially low for years to increase exports.

You may think the USD has been kept artificially low to help US exports, many economist think it is artificially high because it is the worlds reserve

currency, and oil, gold, etc. are quoted in USD. If they start quoting oil in euro or a basket of world currencies many economists predict the

USD will fall 20%. That is the other side of the coin. We shall see what comes to pass in the next 10-20 years.