China's yuan faces significant long-term obstacles to becoming a global reserve currency of any great import, but the biggest challenge in the near term is the fact that nobody wants to buy Chinese bonds.
Foreign investors have been dumping Chinese bonds ever since Russia invaded Ukraine in February last year, wary that Beijing's ties to Moscow could potentially expose overseas holders of Chinese assets to international sanctions.
"It is very hard to create a reserve currency, without attractive reserve assets. China has a problem. It wants foreigners to buy bonds but they have been selling since early 2022," says Jens Nordvig, founder and CEO of Exante Data. Several countries, including Brazil and other major emerging economies in Asia and the Middle East, have called for trade in oil, commodities and other global goods to be invoiced in non-dollar currencies.
The nominal amount of global reserves held in renminbi was $298 billion at the end of last year, down from a peak of $337 billion 12 months earlier. Beijing has gradually allowed more institutions and central banks to enter the yuan-denominated bond market over the past two decades by relaxing rules around quotas, lock-up periods and registration requirements.
The IIF's capital flows data shows some minimal net inflows into China in recent months, but paints a broadly similar picture: demand for Chinese debt has evaporated.
Österreich Neuesten Nachrichten, Österreich Schlagzeilen
Similar News:Sie können auch ähnliche Nachrichten wie diese lesen, die wir aus anderen Nachrichtenquellen gesammelt haben.
Dollar heavy amid U.S. default risks; Aussie, yuan slips on China data missThe U.S. dollar remained under pressure on Tuesday, weighed down by the risk of a U.S. default as a standoff between Democrats and Republicans over raising the debt ceiling showed few signs of being resolved.
Weiterlesen »
Column: Funds sell copper as China's recovery disappointsFunds are turning increasingly bearish on copper as China's manufacturing recovery falls short of expectations and growth slows in the rest of the world.
Weiterlesen »
Why Some Investors Are Betting on China’s Recovery but Avoiding Chinese SharesGlobal investors wanting to profit from China’s economic recovery and dodge geopolitical tensions are increasingly turning to companies in Paris, Las Vegas and beyond
Weiterlesen »
China's Baidu beats quarterly revenue estimates on China re-openingSearch engine giant Baidu Inc beat first-quarter revenue estimates on Tuesday as businesses spent more on advertising amid China's economy recovery, after the country dropped most of its strict COVID curbs late last year.
Weiterlesen »
Column: For Mother’s Day, a critic, his mother and a screenful of memoriesFor Mother's Day, Tribune film critic Michael Phillips sat down with his mother to talk about their shared love of movies.
Weiterlesen »
Column: A 2024 Biden-Trump election would be a contest of unpopularityA rematch between the president and his predecessor wouldn't simply be a rerun of 2020, but a referendum on both of their records — and a test of which one voters like less.
Weiterlesen »