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IMF adds Chinese yuan to its currency basket - business live

Discussion in 'Market News' started by Lily, Nov 30, 2015.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    The International Monetary Fund has votes to add the Chinese currency to its Special Drawing Reserves, alongside the US dollar, euro, yen and pound

    5.27pm GMT

    It appears that the yuan will make up almost 11% of the IMF’s currency basket, once it has been admitted to the Special Drawing Rights fold.

    New #SDR weightings with Chinese Yuan included: USD: 41.73% EUR: 30.93% CNY: 10.92% JPY: 8.33% GBP: 8.09% #IMF RO

    5.26pm GMT

    IMF confirms China's yuan to be added as fifth elite currency in its special drawing rights (SDR) basket. Our Q&A https://t.co/yadCBC609V

    5.24pm GMT

    It’s official -- the International Monetary Fund has given its approval to adding China’s yuan to the currencies which make up its Special Drawing Reserves.

    It’s a symbolic moment in China’s economic development - putting the yuan alongside the euro, US dollar, yen and sterling.




    Related: Q&A: Chinese yuan set to join IMF currency basket

    4.23pm GMT

    This year’s Black Friday didn’t see a repeat of the pushing, shoving and falling over that generated headlines and bruises in 2014.

    But it does appear that UK consumers spent more this time around:

    .@johnlewisretail says #BlackFriday its biggest ever trading day. Sales up 11.9% on last year

    3.46pm GMT

    China’s slowdown hasn’t just hit commodities.

    CNBC asked a group of chief financial officers from Europe and Asia if trading with China had changed this year - and half reported a deterioration in business:

    More than 75% of big businesses have been impacted by China's economic slowdown: CFO Survey https://t.co/tnsi8DbkfE pic.twitter.com/pV5iS6twrH

    3.43pm GMT

    The Bank of England insists that it could raise interest rates in 2016 - but scepticism is rife.

    An experienced City economist had just predicted that rates could remain at just 0.5% for another 18 months:

    Citi’s UK economist Michael Saunders has just pushed out his forecast for the first UK rate hike into H1 2017 (o/a strong £, weaker growth).

    2.28pm GMT

    This should be a Big Week for economics and finance, with the ECB’s monetary policy meeting on Thursday and a crucial US jobs report on Friday which could cement - or derail - an interest rate hike.

    Plus an OPEC meeting on Friday - where oil companies will deliberate over the state of the market.

    Related: Cyber Monday set to build on Black Friday online shopping spree

    International Monetary Fund Managing Director Christine Lagarde and some two dozen officials on the fund’s executive board will gather Monday at headquarters in Washington for one of the most-anticipated decisions outside of actually approving loans for nations in crisis.

    The question inside the 12th-floor, oval boardroom: whether to grant China’s yuan status as a reserve currency by adding it to the fund’s Special Drawing Rights basket. The SDR, created in 1969, gives IMF member countries who hold it the right to obtain any of the currencies in the basket -- currently the dollar, euro, yen and pound -- to meet balance-of-payments needs.

    1.59pm GMT

    Over in Athens, finance minister Euclid Tsakalotos has told investors that
    Greece hopes to achieve a deal on debt relief in February 2016:

    “If we don’t make the critical decision in let’s say February 2016, and we push the critical decision back to next summer or even 2017, then all the results will be delayed.”

    1.50pm GMT

    After a weak start, the main European stock markets have now turned positive.

    Investors are pretty optimistic that the European Central Bank will announce new stimulus measures at its meeting on Thursday:

    ... while anything the ECB does deliver this week, it may only deliver it again with decreasing marginal returns.

    Either way, the ECB should signal that it retains ammunition for later. Any market disappointment would likely prove short-lived.

    Question isn't whether #ECB will move but how. Many options available. Expectations are high: #Draghi can't disappoint. He usually doesn't.

    1.32pm GMT

    Our own Katie Allen has explained why the IMF might add China’s yuan to its basket of currencies, and why it matters:

    Related: Q&A: Chinese yuan set to join IMF currency basket

    12.37pm GMT

    Chancellor George Osborne says small firms will benefit from the extension to the UK’s’ Funding for Lending Scheme:

    It was due to expire in January but I am pleased to say that we are extending the scheme until 2018, supporting more loans. Given the improvement we’ve seen in credit conditions for households and large businesses, as our long-term economic plan moves from rescue to rebuild it is right that we continue to focus the scheme’s firepower on the small businesses that are the lifeblood of the economy.

    The Funding for Lending Scheme will be gradually wound down as the recovery strengthens, delivering a managed exit from the scheme.” <end>

    12.34pm GMT

    Just in... the Bank of England and the Treasury have announced that they are extending their “Funding for Lending Scheme” for another two years.

    A variety of sources indicate that credit conditions for SMEs have been improving: SME lending volumes have increased by £2.1 billion in 2015 so far, and net lending to SMEs by FLS participants was positive in the first two quarters of 2015.

    However, credit conditions for SMEs remain tighter than for large corporations.

    The extension will also ensure that the scheme is gradually phased out, with borrowing allowances reducing over time, thereby minimising risks to the economic recovery from the withdrawal of funding support.

    News Release - Bank of England and HM Treasury announce extension to the Funding for Lending Scheme https://t.co/KdnSKN7QM2

    Clearly the BoE are not going to hike now

    12.18pm GMT

    These pictures from Australia’s Pilbara region remind us what a huge, and messy, operation iron ore production is:

    11.43am GMT

    The ‘spot price’ of iron ore has just hit its lowest price on record, according to industry group Metal Bulletin.

    A tonne of iron ore will cost you less than $43 today, as the selloff which began in Asia ripples through Europe.

    Record low #ironore price yet again today - $42.97 (-$1.53) #MBIOI-62

    Breaking: Iron ore drops below $43 a ton for the first time ever on @IronOreIndex Drops 3.4% to $42.97/t pic.twitter.com/6IWCWfgYQv

    Iron ore sub $43 a tonne. pic.twitter.com/whBQXmz53g

    11.23am GMT

    Never let it be said that bankers are a cold-hearted lot...

    HSBC reduces your entire life to a chart with one line on it. pic.twitter.com/pkzGQybKkQ

    11.19am GMT

    The prospect of paying billions to the Brazilian government in compensation for the Samarco dam disaster has pushed BHP Billiton’s shares down to their lowest since 2008.

    BHP trading at a 7-year low. Brazil looks for $5.2bln compensation... https://t.co/MpGsJFvgg3 pic.twitter.com/UMvWt5Cj8L

    10.47am GMT

    It’s been a rubbish year for mining shares.

    The emerging market slowdown has brought the commodity super cycle to a shuddering halt, sending metal prices to multi-years lows.

    The sector continues to be an illustration of the idea that cheap stocks tend to get cheaper, with little sign that we are nearing a bottom in this beleaguered sector.

    10.17am GMT

    Before you get carried away with the excitement (?!) of Cyber Monday - beware, your purchases may not arrive as soon as promised.

    “A staggering 10% of that won’t be delivered on time and that’s because retailers haven’t got their back end fulfilment capabilities - their organisation, processes and infrastructure - in place to cope with the marketing hype that has been created around Black Friday.”

    9.49am GMT

    Denmark has suffered an unexpected contraction, hit by a slump in demand for its exports.

    Danish GDP shrank by 0.1% in the last quarter, data released this morning shows, compared to a 0.2% expansion in Q2. This was mainly due to a 1.7% decline in exports, while household consumption was flat.

    -0.1% GDP growth in #Denmark Q3, 1st neg. number since Q2/2013. Weak export, (surprisingly) stagnating consumption - https://t.co/hfIO3sq2FB

    9.46am GMT

    Another ugly Monday. A fitting end to an awful month for the miners pic.twitter.com/itxvivI1q4

    9.27am GMT

    The iron ore rout is pulling down mining shares in London.

    BHP Billiton, which produces copper, iron, gold, and coal, is leading the FTSE 100 fallers, down almost 6%.

    “There was a huge impact from an environmental point of view....

    “It is not a natural disaster. It is a disaster prompted by economic activity, but of a magnitude equivalent to those disasters created by forces of nature.

    Related: Brazil to sue mining companies BHP and Vale for $5bn over dam disaster

    8.58am GMT

    The head of one of Greece’s four creditors has declared that he’s optimistic that Athens will get its much-anticipated debt restructuring.

    Klaus Regling, managing director of the European Stability Mechanism (which handles bailout loans) told a Finnish newspaper that Greece should get assistance with debt repayments.

    #ESM MD #Regling itv transcript with Finnish daily “Kauppalehti” @KauppalehtiFi @JarnoHa https://t.co/j1zCCN2MZd pic.twitter.com/84iPVfvjsf

    #ESM #Regling: the Eurogroup has said it is willing to look at further debt relief measures after a positive conclusion of the first review

    #ESM #Regling on #Greece debt relief talks: I’m fairly optimistic we will come to an agreement

    #ESM #Regling: The #Greece govt now understands a nominal haircut is not feasible and I think it’s not necessary

    #ESM #Regling on debt relief: It’s about ensuring #Greece can service its debt in med term to send signal to potential investors & markets

    #ESM #Regling: Institutions will assess debt sustainability again in beginning of 2016 taking in account current econ environment

    #ESM #Regling: debt relief could be granted in tranches in order to have conditionality in place for longer than the ESM program until 2018

    #ESM Regling on IMF joining Greece program: I’m optimistic we will come to agreement, because European partners & IMF want to help Greece

    8.38am GMT

    European stock markets have started the week on the back foot, as the selloff in commodity prices feeds through to equities.

    Here’s the damage:

    The FTSE fell afoul of its usual bugbear this morning, its calamitous commodity sector.

    Not that the oil and mining stocks are as bad as normal, but rather that with little else on offer, and iron ore falling to a 5 month low, the UK index couldn’t manage to mitigate its 45 point drop as the day got underway.

    8.24am GMT

    November has been the cruellest month in a while for gold bugs.

    8.14am GMT

    Analysts at Maike Futures, a brokerage firm, say that iron prices are being pulled down by oversupply:

    “Supply continues to rise while port inventories are starting to climb, weighing on iron ore prices.”

    8.05am GMT

    The iron ore price is weakening today, hit by fears over the global economy and the strengthening US dollar.

    The commodities rout has sent iron ore prices down to a five-month low in China overnight.

    The most active iron ore futures May contract on the Dalian Commodity Exchange dropped to a session low of 293 yuan ($45.81) a tonne, its weakest since July 9. Prices were 3.5 percent lower at 294 yuan by 0250 GMT.

    Iron ore prices have tumbled 35 percent since the beginning of the year as China’s economy cools and construction activity slows in the country.

    Iron ore breaches $40 https://t.co/lTLJRfIzYV via @jasminengzt #ausbiz #china pic.twitter.com/Nq9j4psHKh

    7.54am GMT

    Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

    It could be a red letter day for China. The International Monetary Fund is due to decide whether to add the yuan to its prestigious basket of currencies.

    China has been lobbying for the IMF to add the yuan to its basket of reserve currencies, which it uses to lend to sovereign borrowers. A vote to include the currency in the SDR basket would mark a significant milestone for Beijing, according to experts.

    “The direct impact won’t be felt in the near term, not least because implementation of the new basket won’t be until Q3 2016. However the symbolic importance cannot be overlooked,” said Andrew Malcolm, Asia head of capital markets at law firm Linklaters.

    Related: Chinese yuan likely to be added to IMF special basket of currencies

    Jailed trader Tom Hayes is returning to court in London to appeal against Libor sentence https://t.co/WawOXy60Lz pic.twitter.com/ir31CHcneF

    Continue reading...

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