Foreign Exchange
Surprise RMB strengthening prompts unwinds
"A lot of long [US$] positions were unsustainable and had to be re-evaluated," says forex structuring head
ECB and Riksbank present united front on reserves threat
Government proposals that could cut reserves in half may leave Sweden vulnerable to a crisis and would violate the central bank’s independence, institutions warn
Central banks stress commitment as FX Global Code launches
Central banks worldwide are quick to state they will comply with the new global forex code and expect their counterparties to do the same
Debelle: central banks can benefit from lack of covered interest parity
Increase in the “basis” or deviation from CIP is not always a sign of trouble and can offer reserve managers increased returns, RBA deputy says
Norges Bank reserves swell, thanks to equity returns
Fixed-income portfolio returns were essentially zero in Q1, but the central bank is able to achieve returns on equity holdings
IMF’s Werner: central banks need better understanding of interventions
Central banks in Latin America have employed a host of unconventional market interventions, but figuring out what works and what does not is proving tricky
Book notes: Gaining Currency, by Eswar Prasad
A detailed study into the renminbi’s journey to becoming the reserve currency, taking a close look at the hurdles it has overcome and what obstacles remain in its way to competing on the global stage
Singapore to work with China on capital market development, MAS’s Loh says
“Wider suite” of risk management tools needed to stem risks rising from capital market liberalisation; opportunities to coordinate on other Chinese initiatives
Bahamas further relaxes capital controls
Specific sectors of the economy will be able to obtain foreign exchange from banks both at home and abroad; non-resident firms to gain credit from international banks licensed in the Bahamas
Sterling shorts could see sharp unwinding on Brexit day
As the start of the negotiation process between the UK and EU approaches, an already weak sterling faces more tests
SNB annual report sheds light on equity investing strategy
Central bank details approach to investing around 20% of its foreign exchange reserves in equities, including diversification, activism and avoidance of political considerations
BoE’s Jackson: need to intervene on market function still an open question
Head of forex and reserves management discusses evolving understanding of flash events, market structure, and whether there is a case for further intervention
Iceland lifts capital controls
Controls on individuals, firms and pension funds lifted, though the central bank will retain controls on inflows to resist carry trade
Barbadian finance minister thanks Worrell, despite sacking him
Sinckler says government will “eliminate reliance" on central bank financing; gives Worrell lukewarm thanks for his time as governor
Nigeria’s central bank rolling back forex restrictions
Allocation rules are scrapped under the new regime, while all forex dealers must open outlets at airports to aid travellers; additional forex is to be made available for tuition and medical expenses
Malaysian government opens case on historic forex losses
Task force to probe heavy losses of Bank Negara Malaysia in the early 1990s, which reportedly included costly bets against George Soros
Reserve manager of the year: Bank of Israel
Israel’s central bank has made breakthroughs in its sensitivity analysis of near-optimal portfolios, as well as making notable gains from its diversification strategy
Asset manager of the year: State Street Global Advisors
Boston-based asset manager not only has depth and reach – it has taken customisable services to a new level
Global securities lending services provider of the year: BNP Paribas Securities Services
The French bank has helped a range of official institutions to glean additional revenue from their bond holdings in tight markets
Technology provider of the year (risk management): Calypso Technology
Calypso scored several prestigious client wins in Denmark, France, South Africa and Spain by tailoring its platform to the needs of central banks
Reserve Bank of Tonga makes further tweaks to exchange controls
Reserve Bank continues to relax exchange controls, removing monthly limits and some identification requirements; IMF says central bank making progress
Lebanon’s innovative financial operations not sustainable – IMF
Central bank used a complicated mechanism to simultaneously boost foreign reserves and improve banks’ capital positions, but it cannot be used without limit, the fund warns
Barbados has failed to find growth balance, says governor
Further restrictions on spending needed to protect country’s reserves, says Worrell
African central banks have cut euro exposures, says Uganda’s Kavuma
Combination of negative interest rates and falling reserves hit euro holdings but most central banks still avoid investments within Africa