China’s yuan strengthened, touching a 17-year high, on speculation the central bank will allow the currency to appreciate as part of measures to contain the fastest inflation in more than two years.
The People’s Bank of China increased the amount of cash lenders are required to set aside as reserves by half a percentage point effective on Thursday, it said on its Web site yesterday, pushing the requirement to a record 20.5 percent for the biggest banks.
China will continue tightening monetary policy for “some time,” central bank Governor Zhou Xiao-chuan (周小川) said on Sunday, a day after the nation reported -inflation that was the quickest since July 2008.
“The country will focus more on non-interest-rate measures, including more reserve-ratio hikes to drain cash domestically and faster currency appreciation to contain imported inflation,” said Dariusz Kowalczyk, a Hong Kong-based economist at Credit Agricole CIB.
He expects at least one more reserve-ratio increase this year to 21 percent.
The yuan climbed 0.06 percent to 6.5287 per US dollar as of the 4:30pm close in Shanghai yesterday, according to the China Foreign Exchange Trade System. The currency touched 6.5276 earlier, the strongest level since the -country unified official and market exchange rates at the end of 1993. In Hong Kong’s offshore market, the yuan gained 0.02 percent to 6.5215.
The People’s Bank of China set the currency’s reference rate 0.01 percent weaker at 6.5310. The fixing was 6.5301 on Friday, the strongest level since July 2005.
Twelve-month non-deliverable forwards declined 0.02 percent to 6.3830 per US dollar, reflecting bets the yuan will strengthen 2.3 percent in a year from the onshore spot rate, according to data compiled by Bloomberg. The contracts reached 6.3615 on April 8, the highest level since the same month in 2008.
China’s economy expanded 9.7 percent from a year earlier in the first quarter and consumer prices rose 5.4 percent last month, the National Bureau of Statistics of China said on Friday. Economists expected growth of 9.4 percent and a 5.2 percent inflation rate, based on median estimates in Bloomberg surveys.
Asia’s largest economy has room to raise interest rates and banks’ reserve-requirement ratios this year as the country faces difficulties achieving the 4 percent goal for consumer price increases this year, the China Securities Journal said in a front-page editorial yesterday. The yuan may continue to gain appropriately, the editorial said.
The nation’s third interest-rate increase this year may come as soon as next month and policy makers may consider allowing faster appreciation of the yuan to reduce the cost of imported commodities such as oil, according to Societe Generale SA. A flexible yuan will become a very effective tool for curbing inflation, the China Business News reported yesterday, citing former US Treasury secretary Henry Paulson.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day