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Settlement Currencies RUB RMB [Copy link] 中文

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Post time 2019-9-15 07:23:26 |Display all floors
According to xinhua net:

To use rubles and RMB in settlements between Russian and Chinese companies can guarantee the stability of cross-border settlements and help achieve the long-term strategic goals of bilateral economic cooperation, Sberbank said.

With your own version of SWIFT, you should be fine. You will need to extend that to other countries in BRI. That said, stability and free convertibility must be guaranteed.


PBoC adding 100 tons of gold instead of US bonds is a good move because Trump has been babbling inanely about negative interest rate in the US and "renegotiating" its overseas debt. He does not understand you cannot renegotiate US bonds held by China's treasury.


Japan has over US$1 TRILLION in US bonds. Might be a good idea to talk with Japan about their view on security of holding US bonds in view of the fact that Trump wants negavtive interest rate and want to "renegotiate" US bonds. It's commonly called a BOND DEFAULT, but Trump has had many bankruptcies. He drove his own Casino and his Trump University bankrupt.




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Post time 2019-9-19 19:41:25 |Display all floors
This post was edited by cestmoi at 2019-9-22 09:29

US Repurchase Agreements rate, commonly known as "Repos", spiked the last few days, hovering at about 10%. Repos is short term money. Banks use their bond holdings as collateral and investors lend them money for 24 hours.

There's a short term liquidity squeeze in the US, some believe it is due to people shorting long bonds (10+ years) and buying short term bonds (less than 2 years) because of the yield curve inversion.

Meanwhile the US Fed raiseddropped  indicative rate by 0.25% in anticipation of an economic slowdown.

The money PBoC spent to buy 100 tons of gold would be handy now in the US to mitigate the liquidity squeeze. There's no indication of it getting out of hand though.

So, there you have it, another effect of Trump's signature "Trade War".

Correction 2019-22-09
Meanwhile the US Fed raiseddropped  indicative rate by 0.25% in anticipation of an economic slowdown.
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Post time 2019-9-19 19:52:54 |Display all floors
Courtesy of tradingeconomics dot com


The Federal Reserve Bank of New York injected USD75bn into the US financial system today, a day after purchasing treasuries, MBS and agency debt worth USD53bn in order to pull down the short interest rates. On Monday and Tuesday short-term cash funding available to banks dried up leading to a sharp increase in the rates of overnight loans. On Tuesday, the overnight repo rate which usually trades around Fed target range surged to as high as 8.5 percent. It is likely that the sudden shortage of cash was caused by withdraw of funds from money market accounts by corporations to pay for quarterly tax bills due on September 15th and the settlement of USD78BN worth of US Treasury notes and bonds sold by The Treasury last week. Repo Rate in the United States averaged 2.39 from 1995 until 2019, reaching an all time high of 6.94 in September of 2019 and a record low of -0.01 in December of 2009.
USreposRate.JPG






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Post time 2019-9-21 07:44:17 |Display all floors
I'm not a financial expert, but it sound not so good for the orange one.
Human lives mean nothing when the western warmongers see a bigger gain through war

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Post time 2019-9-22 09:37:15 |Display all floors
Have you ever wondered how bank set the exchange rate  between 2 currencies?

They use the difference in interest rate plus a "perception" of the stability and free convertibility of the currencies.  Perception is important. For example, you wouldn't want to hold onto large amount of Venezuela's VEF, no matter how high Caracas sets its interest rate.
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Post time 2019-9-23 12:19:01 |Display all floors
cestmoi Post time: 2019-9-22 09:37
Have you ever wondered how bank set the exchange rate  between 2 currencies?

They use the differenc ...

re: " no matter how high Caracas sets its interest rate."

You're correct, however I see a very prosperous future ahead for the Country...

   Uncle Sam's and Eu's economic sanctions which I consider a War by another name are fading and the incredible wealth this Bolivian Republic is calling its own is mind boggling by any standard...

   a rather simple comparism: Saudi is way below the mineral wealth of Venezuela, as far as black gold is concerned;


The World's Largest Oil Reserves By Country - just for info
  • Venezuela - 300,878 million barrels.
  • Saudi Arabia - 266,455 million barrels. ...
  • Canada - 169,709 million barrels. ...
  • Iran - 158,400 million barrels. ...
  • Iraq - 142,503 million barrels. ...
  • Kuwait - 101,500 million barrels. ...
  • United Arab Emirates - 97,800 million barrels. ...
  • Russia - 80,000 million barrels.


   However; this is my own opinion and I'm not getting paid for it...

   I do however very much dislike when powerful Nations trying to get hold of foreign resources to enrich themselves...

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