zob 22nd June 2016 1:23
German Economic News: China had the yuan in summer 2015 a surprising degree and above a few days then depreciated moderately. Expect that the Chinese central bank will devalue the yuan in the current year?
Yes, we expect a further gradual devaluation of the renminbi – but in relation to the trade-weighted currency basket. However: Too much depreciation is likely the government will not accept, otherwise the flight of capital could increase further
German Economic News:. How would further devaluation of the yuan you consider to be the international financial markets impact?
in a gradual depreciation would decrease the pressure on the stock of China’s currency reserves. Because of the positive effect on China’s trade balance would predominate. Thus, the Central Bank of China would not remain under pressure, significant reserve stocks to sell (especially US and euro area government bonds). Otherwise it would look after a sudden devaluation of – as in August 2015 or in January 2016. This could easily be interpreted again as a sign of systemic risks and encumber risk assets Total
German Economic News: <. / strong> has there been a devaluation-race important central banks and, if so, he was stopped at the G20 meeting in Shanghai?
There was a competitive devaluation, as long as the US Federal Reserve Fed to it did not take part – with the result of a significant appreciation of the US dollar between mid-2014 and the end of 2015. the Fed has but now abandoned and clearly communicates that their optimistic growth and inflation outlook is based on the assumption that such a appreciation episode is not repeated. “All values against the US dollar from” – that is no longer running ever since. Signs was as the relatively openly expressed conflict between the delegations of Japan and the United States at the last meeting of G7 finance ministers and central bankers in Japan. But this also means: For most central banks, the exchange rate channel of monetary policy is clogged. Re-inflation is – where it is still needed – an even more difficult task
German Economic News: The dollar could be due to actual or anticipated rate hikes by the Fed continue to appreciate. , What danger consists of emerging economies, the opportunities are there?
A quick tightening cycle in the United States would bring those EM countries in trouble, the current account deficits or already have a high capital flight. After the US employment report for May, but is distinguished from a more cautious approach by the Fed. but anyway is not a broad, critical development expected. Because the exchange rates of most EM currencies can move freely now. You may have already devalued in the past and thus anticipated a good part of this effect. A cautious Fed would not be a burden on the EM currencies
German Economic News:. How much would the pound in your opinion for emergency release of Britain from the EU about depreciate? Could it lose its status as a world reserve currency, such as Standard & amp; Poor’s recently suspected?
Initial could in the case of a Proposed referendum on United Kingdom membership of the European Union lose the pounds quite 10%. Medium to long term it is (incl. The Leitwährungs status) depend on whether fast an association agreement a la Norway is likely. Brussels is currently supported on this issue, but that may be theatrical thunder before the referendum. With sufficiently reliable view of an association agreement, the pound then would even back recovery potential. Without such an agreement there is a risk that the current account deficit of the United Kingdom is no longer financially viable. A current account crisis – which also teaches the experience of the British – may lead to devaluation beyond the 30% mark
German Economic News: speculators bet on a devaluation of the Saudi. Rial – and thus de facto to a decoupling from the dollar. How do you assess the financial position of Saudi Arabia and the stability of its currency?
The breach of such an exchange rate peg is always very difficult to predict. can hold it but that the economic performance of Saudi Arabia is currently difficult with a permanent peg to the US dollar compatible. The pressure to repeal the connection will be greater, the lower the price of oil
German Economic News:. If the dollar in ten or fifteen years from now the undisputed ? his world currency
from an economic perspective, a change can hardly be expected: So is no alternative in sight, and it is efficient for the global economy, to agree on a world-leading currency. Whoever deviates the first, has to suffer efficiency losses. Therefore the Leitwährungs status is quite stable condition. However, can be increased tendencies observed that the United States use the role of the dollar as world reserve currency-to to advance their political agenda. Should the US government cover at this point, that could damage the reputation of the dollar as world-reserve currency.