China’s central bank is probably using stealth measures to intervene in the foreign-exchange market and shore up its currency reserves, according to Daiwa Capital Markets Inc.
The People’s Bank of China (PBOC) might have bought foreign currency from local banks, used the forwards market to prop up the yuan and asked the nation’s sovereign wealth fund to liquidate overseas assets, Daiwa analysts Kevin Lai (賴志文) and Junjie Tang (唐俊杰) wrote in a note on Tuesday.
While Lai did not provide any direct evidence in the note, he said in an e-mailed response that his conclusions were based on a “logical deduction.”
China’s foreign-exchange stockpile, the world’s largest, shrank by US$28.6 billion last month, the smallest decline since June last year, to US$3.2 trillion. That was lower than the US$40.9 billion decrease predicted in a Bloomberg survey of economists, and compares with December last year’s record drop of US$108 billion as the monetary authority supported the yuan.
“As everyone is watching the foreign-exchange reserves number so carefully, it is important for the government to show a nice number,” Hong Kong-based Lai said. “Otherwise there will be market panic.”
China’s State Administration of Foreign Exchange (SAFE) yesterday said on its microblog that assets of the nation’s sovereign wealth fund, China Investment Corp (CIC, 中國投資公司), are not included in the country’s foreign-exchange reserves. SAFE, which did not name Daiwa, said its reserves are ample.
The PBOC did not immediately reply to a faxed request for comment. Two calls to CIC’s press office went unanswered.
The monetary authority launched a two-pronged attack on yuan speculators earlier this year, choking outflows from the mainland while mopping up the currency offshore. The nation’s defense of the yuan depleted its foreign-exchange reserves by US$513 billion last year, the first annual drop since 1992.
The purchase of foreign-currency assets and repayment of overseas debt by companies and individuals contributed to the drop, PBOC Deputy Governor Yi Gang (易綱) was cited as saying by Market News International.
Bloomberg Intelligence estimates that a record US$1 trillion fled overseas last year. The official foreign reserves data do not necessarily give a comprehensive picture because non-PBOC institutions might absorb flows, Goldman Sachs Group Inc economists wrote in a note on Monday.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
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
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
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],”