Foreign Exchange
SNB ups allocation to currency reserves
New rule allows for higher allocations to reserves provision even in periods of low nominal growth; foreign exchange intervention now a key monetary tool
Ukraine’s central bank calls for action against illegal forex dealers
NBU says authorities failed to act against 32 illegal operations in Kyiv; says it will publicise further information on unauthorised forex dealers
Ukrainian central bank proposes abolition of forex restrictions
The central bank’s multi-stage plan includes a draft law, despite political disputes
Some way to go for renminbi as reserve currency – Bundesbank's Thiele
Chinese investment markets should be opened up to foreign investors, Thiele says
Rand volatility not driven by South African economic ‘surprises’ – IMF paper
IMF working paper finds that surprises in commodity prices, domestic politics and US economics impact the volatility of the South African rand rather than economic surprises in South Africa or China
IMF lauds renminbi SDR launch, but some see momentum stalling
Fund officials praise China’s proactive approach to meeting SDR goals, but others warn progress on renminbi internationalisation may be slowing
BIS survey points to turnaround in global forex volumes
Latest survey suggests more than a decade of growth may have come to an end, as data points to a restructuring away from spot trades towards derivatives
Capital outflows look manageable as Iceland moves to lift controls – central bank
A “stress test” of potential outflows implies the Icelandic financial system and central bank reserves will cope when capital controls are lifted; the government bill prepares to release funds
China to create own version of FX code
A newly established Chinese FX Committee is working on creating a Chinese version of the Global Code of Conduct, for domestic and foreign banks operating in the onshore market
PBoC gives World Bank green light as China’s first SDR bond issuer
World Bank to issue China’s first bond denominated in special drawing rights, in “landmark” step towards opening up Chinese bond market
Singapore’s GIC warns of lower returns in coming years
High valuation of asset prices and modest growth outlook points to lower returns in coming decade or two, GIC says; 20-year annualised real rate of return fell last fiscal year
Indian reserves climb to $360.2bn at end-March
Reserve Bank of India’s latest report on reserve management shows 2.8% increase over six months; two-thirds of foreign currency assets invested in securities
Bangladesh has more FX reserves than it needs, chief economist says
Biru Paksha Paul says Bangladesh only needs enough reserve to cover six months’ worth of imports, and it has now exceeded that; sees benefits from low fuel prices in recent years
A year of progress for Chinese reforms, but there is much still to do
Pan Gongsheng, deputy governor of the People’s Bank of China, writes about China’s growth prospects, RMB exchange rate reform and the past years’ stock market fluctuations
Discontinuation of Libor would result in ‘significant systemic risk’, Powell says
Fed’s Powell discusses future of Libor; discontinuing the benchmark rate could entail “substantial losses”, he says
Renminbi investments to be included in Singapore reserves
Monetary Authority of Singapore says its investments in the Chinese currency will be included in official reserves “from June 2016 onwards”, now it is easier to repatriate funds
Steps still needed for renminbi to become reserve currency – BIS head of banking
BIS’s Zöllner considers whether renminbi will become reserve currency; continued modernisation of market infrastructure needed, he says
Nigerian central bank announces forex liberalisation
Nigeria’s central bank unveiled plans to make up to $2.5 billion available to the country’s non-oil exporters; currency will float from June 20
The renminbi and the international monetary system
Zhou Yueqiu, director of the Urban Finance Research Institute of the Industrial and Commercial Bank of China, offers some perspectives on the future role for the renminbi post-SDR inclusion
Co-ordinating China’s domestic and international efforts
As China becomes an increasingly significant player on the international stage it can no longer be insular in its policies, writes deputy governor of the People's Bank of China, Yi Gang
Chile expands dollar holdings, central bank annual report shows
Central Bank of Chile reserve allocations in euro, Canadian dollar and Australian dollar fall, as dollar holdings rise
Divergent monetary policies are top concern for reserve managers in 2016
Reserve managers view divergent monetary policies among the world’s top central banks as the most pressing challenge they face in 2016; asset and currency diversification continues
More ‘flexible’ Nigerian exchange rate regime met with cautious optimism
Central bank announces intention to move to more flexible regime, though exact parameters not yet announced; analysts seem hopeful about the move but lack of details is worrying
‘Challenging' year spurs diversification of Hong Kong's exchange fund
HKMA says it is accelerating its process of reserves diversification after it was hit by a "triple whammy" in all major asset classes in 2015