Currency Wars by James Rickards, 2011, Excerpts
The currency itself is the ultimate target in any financial war. Financial warfare is the preferred method of those with inferior weapons but greater cunning. If you destroy the currency, you destroy all markets and the nation. Three super currencies – the dollar, the euro, and the yaun – are the superpowers in a new currency war.
In the News
Lira Extends Slide as Erdogan Says Turkey in an Economic War
12 Aug 2018
Turkey’s lira slumped for a fourth day to a new record low, with the sell-off spreading to other emerging-market currencies, after the country’s president showed no signs of backing down in a standoff with the U.S. The Turkish currency has been a casualty of a deepening crisis spurred by the administration’s growth-at-all-costs agenda and a worsening spat with the U.S., which sanctioned Turkey over the detention of an American priest. The lira’s plunge sparked tremors through global markets on Monday. Erdogan remained defiant, saying the country is in an “economic war.” He also ruled out an agreement with the International Monetary Fund. Years of a growth-at-all-costs policy bias have left Turkey’s companies saddled with hundreds of billions of dollars in foreign debt, runaway inflation and one of the world’s largest current-account deficits.
JPMorgan Says Trump May Sell Dollars as Weapon in U.S. Trade War
08 Aug 2018
With the U.S. waging a trade war on several fronts, economists are starting to take seriously the idea that President Donald Trump could act on his preference for a weak dollar. “While not our base case scenario, we cannot rule out a turn toward a more interventionist currency policy, particularly since the current administration has, at times, hinted at a preference for dollar weakness or objected to perceived Chinese currency manipulation,” Michael Feroli, JPMorgan Chase & Co.’s chief U.S. economist, said in a research note this week. In a Twitter flurry last month, Trump accused China and the euro area of manipulating their currencies and complained that a rising dollar is blunting America’s “competitive edge.” If China takes the lead in a currency war, letting the value of the yuan fall, it could have a deflationary impact around the world, Oxford Economics said in a note this week.
Turkey’s Cratering Markets Stoke Speculation Over Extreme Measures
07 Aug 2018
Desperate measures are in the air in Turkey: trading rooms are awash with talk of a bailout by the IMF and potential capital controls. The central bank and government have remained largely silent as the currency plummeted to record lows and the U.S. imposed sanctions and threatened more. The lira rebounded after falling by the most in a decade on Monday, getting a lift from news that Turkish officials were headed to Washington for talks. The lira is buckling under the weight of one of the widest current-account deficits in emerging markets and inflation is spiraling ever higher. Turkey has overtaken Argentina as the world's worst place for debt investors
IMF projects Venezuela inflation will hit 1,000,000 percent in 2018
23 Jul 2018
The South American nation’s economy has been steadily collapsing since the crash of oil prices in 2014. “We are projecting a surge in inflation to 1,000,000 percent by end-2018 to signal that the situation in Venezuela is similar to that in Germany in 1923 or Zimbabwe in the late 2000’s,” Alejandro Werner, director of the IMF Western Hemisphere department. Consumer prices have risen 46,305 percent this year. The nation’s central bank had halted the release of basic economic data. President Nicolas Maduro says the country is victim of an “economic war” waged by opposition businesses with the support of Washington. His government routinely dismisses the IMF as a pawn of Washington.
Trump 'ready' to tax all Chinese imports
20 Jul 2018
The President has also been complaining that a strengthening dollar has been hurting US business. In a series of tweets he blamed the higher dollar on currency "manipulation" by China and the European Union. Trump says he is ready to intensify his trade war with China by slapping tariffs on all $500bn of imports from the country.
China Won’t Weaponize the Yuan in Trade War
02 Jul 2018
Chinese central bankers vowed to keep their nation’s currency stable and to not deploy it as a weapon in the trade conflict with the U.S., helping the yuan reverse some of its recent plunge. The yuan is the worst performing currency in Asia over the past three weeks, losing 3.7 percent against the dollar as the domestic economy slows and the nation slides closer to a trade war with the U.S. A failure to contain the tumble will feed speculation that officials are effectively depreciating the currency to defend against the effects of trade tariffs.
Argentine Peso Resumes Plunge After Central Bank Shakeup
15 Jun 2018
The Argentine peso resumed its slide toward a historic low as a major shakeup that put a former Wall Street trader at the helm of the nation’s central bank failed to curb the currency’s massive volatility. Investors had expected that a $50 billion deal with the International Monetary Fund last week would return calm to the market. Instead, the peso collapse has added to the woes of a country already under siege from double-digit inflation and a ballooning current-account deficit.
Turkish lira dives against the dollar
23 May 2018
The Turkish lira has fallen more than 5% to hit a record low against the US dollar. The currency has lost more than a fifth of its value this year as fears grow that the government might undermine the powers of Turkey's central bank. Mr. Erdogan said he plans to take more control of the country's finances after a general election on 24 June.
U.S. Raises Pressure on Iran With Sanctions on Currency Exchange
11 May 2018
The U.S. took a step toward cutting Iran off from the global economy on Thursday, levying sanctions on a financing network and accusing the country’s central bank of helping funnel U.S. dollars to the blacklisted elite military unit known as the Quds Force. Acting jointly with the United Arab Emirates, the U.S. Treasury Department imposed sanctions on several Iranian companies, individuals and officials it said are operating an illegal currency-exchange network in the U.A.E.
Iranians launch banknote protest to get round censorship
29 Apr 2018
A group of Iranian Twitter users are spreading protest messages by writing slogans on banknotes. "Banknotes are our un-censorable messengers," one user wrote, referring to a rumored plan to permanently block the popular messaging app Telegram, which is by far the most popular digital communication tool in Iran. Around 40 million Iranians - half the population - use the Telegram app. Slogans included "I am an overthrower". Other messages read: "Our enemy is right here, they say it's America".
Trump Bucks Treasury in Ripping China, Russia as FX Meddlers
16 Apr 2018
Trump took to Twitter on Monday to declare that China and Russia are playing what he called a “currency devaluation game” at a time when the U.S. Federal Reserve is raising interest rates. “Not acceptable!,’’ Trump wrote. His comments contradicted a Treasury Department semi-annual report on Friday that refrained from naming any country a currency manipulator based on specific criteria.
Time to spend your old tenners – just three shopping days left
26 Feb 2018
The cut-off date for using old-style paper £10 notes is fast approaching, with just three shopping days left before the Thursday March deadline when they cease to be legal tender. The new plastic £10 note featuring Jane Austen came into circulation in mid-September, replacing the £8bn-worth of notes that carry the image of Charles Darwin.
Venezuela's new bitcoin: an ingenious plan or worthless cryptocurrency?
19 Feb 2018
Venezuela prepares for the pre-sale of its new bitcoin-like digital currency called the petro. The launch on Tuesday comes amid a deep economic crisis and a government politically isolated and cut off from most international financing. Maduro claims that each petro token will be backed by one barrel of the oil-rich nation’s petroleum, and claims that about 100 million petro tokens worth some $6bn will be issued. The petro is designed to raise hard currency and to function as a payment method for foreign suppliers now that most transactions have been stymied by financial sanctions imposed by Washington last year. Some analysts see the petro as a desperate move to secure cash amid an unprecedented economic meltdown. Venezuelans are now suffering from widespread food shortages, hyperinflation that could hit 13,000% this year, and the collapse of the traditional currency, the bolívar.
Venezuela to launch cryptocurrency to combat US 'blockade'
03 Dec 2017
President Nicolas Maduro has said Venezuela would launch a cryptocurrency to combat a US-led financial “blockade”. The digital currency will be backed by Venezuelan reserves of gold, oil, gas, and diamonds. US sanctions are hurting Venezuela’s ability to move money through international banks. Currency controls and excessive money printing have led to a 57% depreciation of the bolivar against the dollar in the last month alone on the widely used black market. Maduro says he is trying to combat a Washington-backed conspiracy to sabotage his government. He said Venezuela was facing a financial “world war.”
Venezuela’s Behind on Its Debt and Facing Two Huge Bond Payments
23 Oct 2017
Increasingly isolated by U.S. financial sanctions, Venezuela has already fallen behind on interest payments worth $350 million that were due earlier this month. While the plunge in crude prices deepened an economic collapse and triggered a humanitarian crisis, President Nicolas Maduro, has been determined to meet all foreign bond payments. He’s cut imports to free up hard currency for debt payments, tapped China and Russia for loans and mortgaged some of the country’s gold stash. Yields on the bonds have been eye-catching: over 9 percent per year on average over the past 20 years. This combination -- outsize profits for Wall Street traders and shortages of food and medicine for Venezuelans back on the ground -- has been so jarring that it even led to the coining of a new term for the nation’s debt: hunger bonds.
Trump administration again declines to name China currency manipulator
17 Oct 2017
The United States on Tuesday declined to name China as a currency manipulator although it remained critical of the Chinese government’s economic policies ahead of a planned visit to Beijing by President Donald Trump, but it kept China on a currency “monitoring list”. Trump, who on the campaign trail blamed China for “stealing” U.S. jobs and prosperity by cheapening its currency, had repeatedly promised to label the country as a currency manipulator on “day one” of a Trump administration - a move that could lead to punitive duties and other action. But the president’s comments on China have been less harsh since he took office in January.
Assad appears on Syrian banknote for first time
03 Jul 2017
President Bashar al-Assad has appeared on the Syrian currency for the first time since taking office, with his portrait printed on a new 2,000-pound banknote ($3.9) that went into circulation on Sunday. The currency previously only carried images of historic icons or pictures of his father. Syria's currency has plunged in value since the country's conflict began in 2011. Inflation has also soared.
Qatari riyals no longer available at many UK banks
30 Jun 2017
Individual customers at Barclays, RBS, Lloyds Banking Group and Tesco Bank cannot currently buy or sell riyals. In early June, Qatar's Gulf neighbours Saudi Arabia, UAE, Bahrain and Egypt ceased air, sea and land links with the country, which has been accused of funding terrorism. Qatar denies the claim. The cutting of diplomatic ties by Qatar's neighbors has prompted wide fluctuations in the value of the country's currency.
US and China sign trade agreement
12 May 2017
No longer do you hear the words "currency manipulator" or "unfair trade partner" from Trump's lips. The US and China have reached a 10-point trade deal that opens the Chinese market to US credit rating agencies and credit card companies. Under the deal, China will also lift its ban on US beef imports and accept US shipments of liquefied natural gas. In return, Chinese cooked chicken will be allowed into the US market and Chinese banks can enter the US market.
Donald Trump: China 'not a currency manipulator'
13 Apr 2017
Donald Trump has said his administration will not label China a currency manipulator, rowing back on a campaign promise. He made the comments days after meeting China's President Xi Jinping. Before the US election, Mr. Trump promised to label China a currency manipulator on his first day in office.
South Africa's credit rating has been cut to junk status
03 Apr 2017
South Africa's credit rating has been cut to junk status by the ratings agency S&P Global. The agency said that political upheaval was endangering the economy. S&P also expressed concern over the nation's debt situation and in particular the expense of backing state energy firm Eskom. Moody's is due to make its latest pronouncement on South Africa's credit rating on Friday. It has the country two notches above junk status.
Trump Florida Speech
18 Feb 2017
My administration has begun plans to crack down on foreign cheating and currency manipulation which is killing our companies and really, really hurting our workers. We're going to end it.
South Africa's rand currency 'rigged by banks'
16 Feb 2016
Local and international banks have been accused of rigging the price of South Africa's currency, the rand. Global giants Barclays, JP Morgan and HSBC are among 17 banks named as part of the two-year investigation. Banks colluded, using online chat rooms to co-ordinate fictitious bids and offers in order to sway the market. President Zuma recently accused the country's four largest banks of controlling the economy. The South African rand has nearly halved in value against the US dollar over the past five years, as the country goes through an economic crisis.
Japan rejects Trump accusation of devaluing yen in currency war
01 Feb 2016
Japan has rejected Donald Trump's claims that Tokyo was deliberately weakening the yen to gain an unfair trade advantage, along with China and Germany, were guilty of "global freeloading" for using regulation and currency devaluation in their trade dealings with the US. The president's trade adviser, Peter Navarro, also accused Germany of using a "grossly undervalued" euro to gain an unfair advantage over the US and other EU countries.
Merkel rejects Trump advisor euro claim
31 Jan 2017
The German Chancellor has rejected comments made by a Trump advisor that Germany uses an undervalued euro to exploit trading partners. Peter Navarro, the head of Mr. Trump's National Trade Council, told the Financial Times that the euro is a German currency in disguise. The US regularly tells China its currency is too cheap and gives its products an advantage in world markets. Mr Navarro is also an economics professor at the University of California, Irvine. Mr Navarro has been a fierce critic of China.
Euro 'could fail', says man tipped as US ambassador to EU
25 Jan 2017
The man tipped to be Donald Trump's ambassador to the European Union, Professor Ted Malloch, has told the BBC the single currency "could collapse" in the next 18 months. He also questioned the future of the single currency. "I think it is a currency that is not only in demise but has a real problem and could in fact collapse in the coming year, year and a half. I am not the only person or economist of that point of view. Joseph Stiglitz - the famous World Bank economist - has written an entire book on this subject."
Venezuela's new high value banknotes enter circulation
17 Jan 2017
Venezuela has issued new larger denomination banknotes in response to the country's soaring rate of inflation. The three notes, ranging from 500 to 20,000-bolivars, have entered circulation with the aim of making paying for essentials easier. Until now, the 100-bolivar note had been the country's largest, worth just three US cents on the black market. The new 20,000-bolivar note is still worth less than $6 on the black market. Inflation in Venezuela is forecast to reach 1,600% this year.
Venezuela pulls highest-value banknote 'to strike against mafia'
12 Dec 2016
The Venezuelan government has announced it will remove the country's highest-denomination banknote from circulation within 72 hours to combat contraband, making up almost half of all currency. Venezuelans will have 10 days from Wednesday to exchange the notes for coins and new, higher-value bills. The president said the aim was to tackle transnational gangs which hoard the Venezuelan notes abroad, a move he has in the past described as part of the "economic war" being waged against his government. Venezuela's currency has fallen dramatically amid skyrocketing inflation. The International Monetary Fund estimates that next year's prices will rise by more than 2,000%.
05 Dec 2016
US President-elect Donald Trump has posted a series of tweets criticizing China for its monetary policy and its operations in the South China Sea. "Did China ask us if it was OK to devalue their currency. I don't think so!" The US has previously criticized China's yuan devaluation, saying it unfairly favors Chinese exporters.
Venezuela issues new banknotes after inflation
04 Dec 2016
Venezuela is issuing new higher-value notes to help deal with soaring inflation. A backpack full of cash is often required to pay bills at a restaurant or supermarket. The central bank said that six new bills ranging from 500 to 20,000 bolivars would come into circulation on 15 December. Currently the largest note is 100 bolivars and worth about two US cents. Over the past month, the currency has tumbled by 60% against the dollar on the black market. President Nicolas Maduro blamed the economic crisis is being backed by the US. The International Monetary Fund (IMF) estimates that next year's prices will rise by more than 2,000%.
Mexican peso hits record low as Trump wins U.S. election
09 Nov 2016
The Mexican peso plunged to a record low on Wednesday as stunned investors digested the news that billionaire businessman Donald Trump had won the U.S. presidential election. The Mexican peso sank more than 13 percent at one point, to an all-time low just below 21.00 pesos per dollar, before recovering some ground to trade around 19.91 pesos per dollar, still down 8 percent on the day.
09 Nov 2016
Indian Finance Minister Arun Jaitley says "honest people" have no need to worry about a decision to scrap 1,000 and 500 rupee notes, the move would flush out tax evaders, help India move towards a cashless economy, saying that farmers could "now keep their money in banks". The surprise move, announced on Tuesday evening, is part of a crackdown on corruption and illegal cash holdings. The announcement was met with shock in India. The banknotes declared illegal tender represent 85% of cash in circulation in India. People will be able to exchange their old notes for new ones at banks over the next 50 days but they stopped being legal tender at midnight on Tuesday. There are also going to be limits on cash withdrawals from ATMs starting on Thursday. The idea here is to lock out money that is unaccounted for and make it visible for tax purposes - banks will be happy to exchange a few thousand rupees, but will be asking questions of those who turn up with hundreds of thousands or millions in currency.
03 Nov 2016
Egypt has floated its currency in a move that has reduced its value by almost 50% against the dollar. The move is a key requirement of the International Monetary Fund (IMF), from which Egypt is asking for a $12bn loan over three years. Another reform it is facing is reducing or removing altogether state subsidies on fuel to meet IMF conditions. It has already cut subsidies on household electricity and increased the price of sugar by 40% for some Egyptians. Egypt has struggled to attract foreign investment since the political turmoil in 2011 during the so-called Arab Spring that saw former president Hosni Mubarak overthrown. The change of regime dented tourism numbers, one of Egypt's most important foreign currency earners, and prompted a general fall in international investor confidence. Egypt's economy is the second largest in the Arab world, after Saudi Arabia.
Less than one euro to the pound at many UK airports
10 Oct 2016
The continued fall in sterling's value means that the average rate available at 17 airport bureau of exchange is now just 99 euro cents to the pound. Since the UK's Brexit vote in June, the pound has fallen sharply in value. The average US dollar rate at the airports is down to $1.08 to the pound.
Hammond urges calm over pound flash crash
07 Oct 2016
The pound was pummelled in the currency markets in Friday Asian trading, with traders blaming concerns over Brexit and a flash crash that hit the market. The pound briefly fell 6% to $1.1841, the biggest move since the Brexit vote. Sterling later recovered most of those losses but remained 1.3% lower. Analysts think a news report could have triggered automated trading systems to sell the pound heavily in a short space of time. Analysts at HSBC are forecasting that the pound could fall to $1.10 and could be worth just one euro by the end of next year.
The world's worst performing currency right now is Mongolia's
17 Aug 2016
Mongolia's currency is on its longest losing streak on record as the government grapples to contain an economic crisis. Back in 2011, a mining boom helped make it the world's fastest-growing economy with growth in gross domestic product of around 17.5%. But then commodity prices collapsed. And so did demand from China, which buys 90% of Mongolia's exports, making it the world's worst-performing currency, says Bloomberg data. Due to its cash shortage, Mongolia has borrowed massively and now owes dinosaur-sized interest payments of a debt load of nearly $23bn. This has fueled speculation that Mongolia could face a sovereign default or need a bailout. A delegation from the International Monetary Fund arrived in the capital Ulaanbaatar today.
Trump Republican Nomination Acceptance Speech
21 Jul 2016
We are going to enforce all trade violations against any country that cheats. This includes stopping China’s outrageous theft of intellectual property, along with their illegal product dumping, and their devastating currency manipulation. Our horrible trade agreements with China, and many others, will be totally renegotiated.
Nigeria uncouples naira from dollar to combat currency crisis
15 Jun 2016
Nigeria says it will allow the embattled naira to trade freely in a move to control the currency crisis in Africa's most populous nation. The new system is to come into effect on 20 June and is expected to lead to a significant devaluation of the naira. Being a major oil exporter, Africa's biggest economy has been severely hit by the fall in commodity prices. The fixed currency rate had created a vast black market for US dollars and squeezed the country's economy.
Officials: US considers easing ban on dollars to help Iran
01 Apr 2016
The Obama administration is considering easing financial restrictions that prohibit U.S. dollars from being used in transactions with Iran. The change could prove significant for Iran’s sanctions-battered economy. It also would be highly contentious in the United States, where Republican and some Democratic lawmakers say the administration promised to maintain a strict ban on dollars.
05 May 2016
The European Central Bank (ECB) says it will no longer produce the €500 (£400; $575) note because of concerns it could facilitate illegal activities. It will stop issuing the note around the end of 2018, when it will bring in new €100 and €200 banknotes. The UK asked banks to stop handling €500 notes in 2010 after a report found they were mainly used by criminals. A report earlier this year for the Harvard Kennedy School, urged the world's 20 largest economies to stop issuing the largest notes in circulation - £50, $100 and €500 notes - to tackle crime, the high-denomination notes were favored by terrorists, drug lords and tax evaders.
Trump accuses China of 'raping' US with unfair trade policy
02 May 2016
Republican presidential front-runner Donald Trump has accused China of "raping" the US, in renewed criticism of China's trade policy. Mr Trump, a billionaire businessman, has long accused China of manipulating its currency to make its exports more competitive globally. This, he says, has badly damaged US businesses and workers. "We can't continue to allow China to rape our country, and that's what we're doing," he told the campaign rally on Sunday.
South Africa's economy 'in crisis'
24 Feb 2016
The South African economy is 'in crisis' says the country's finance minister Pravin Gordhan, he cut the country's growth forecast for 2016 to 0.9%, down from 1.7%. He conceded the economy is struggling with shrinking growth, 25% unemployment, and widespread poverty. The South African currency, the rand, which has halved over the past five years, fell after the speech. It fell around 2.25% to make one rand worth around $0.0639. He had been expected to announce plans on privatizing state assets.
Pound hits lowest level against dollar since 2009 on Brexit fears
22 Feb 2016
The pound hit its lowest level against the dollar in almost seven years on concerns about a possible UK exit from the European Union. The steep fall adds to losses made by the pound over recent months. So far this year, fears of a British exit from the EU - dubbed 'Brexit' - have already pushed the pound down by more than 4% against the US dollar. The pound has already dropped more than 17% against the dollar in the last 18 months, partly due to the outlook for UK interest rates.
China bank chief says 'speculators' caused yuan fall
14 Feb 2016
He said there was no reason for the yuan to keep depreciating in value and that China would not let international speculators dominate market sentiment. Efforts to defend the yuan have eroded China's foreign currency reserves. In January alone, the reserves plunged by $99.5bn as the People's Bank of China sold dollars in an effort to shore up the value of the yuan. Fears of an economic slowdown have caused some investors to move their money out of China in search of better returns elsewhere. The Chinese authorities fear a rapid devaluation of their currency, as it could destabilize the economy. To stabilize the situation, China has been selling dollars and buying yuan.
Yellen warns US financial conditions have worsened
10 Feb 2016
Ms. Yellen added China's "unclear" currency policy was fueling global stock market volatility. She said the decline in China's currency, the yuan, had "intensified uncertainty about China's exchange rate policy and the prospects for its economy. This uncertainty led to increased volatility in global financial markets and exacerbated concerns about the outlook for global growth."
China's currency reserves plunged in January
07 Feb 2016
China's foreign currency reserves plunged by $99.5bn in January, the People's Bank of China reported. China has been running down its vast foreign currency reserves in an attempt to boost the value of its own currency and stem a flow of funds overseas The Chinese authorities fear a rapid devaluation of their currency, as it could destabilize the economy. To stabilize the situation China has been selling dollars and buying yuan. At $3.23 trillion, China still has the world's biggest reserve of foreign currency holdings. But that has declined by $420bn over six months and stands at the lowest level since May 2012. "While the remaining reserves still represent a substantial war chest, the mathematics around this rapid pace of depletion in recent months is simply unsustainable for any length of time," said Rajiv Biswas, Asia Pacific Chief Economist, IHS Global Insight.
Why is the pound falling so sharply?
19 Jan 2016
The value of the pound has been sliding on international currency markets, declining nearly 4% since the start of 2016. It has been losing ground against the euro for the past eight weeks, its longest downward streak since the single currency was introduced in 1999. Last week, it hit its lowest level in euro terms for a year. Against the dollar, it has fared even worse, plumbing depths not seen since mid-2010. That makes it one of the worst performing major currencies. Chancellor George Osborne recently warned that the UK was facing a "cocktail" of serious threats from a slowing global economy. He added that this year was likely to be one of the toughest since the financial crisis, "2016 is the year of mission critical". In the words of Esther Reichelt of Commerzbank, "the headwinds to the British economy have definitely increased."
GOP debate in North Charleston, South Carolina.
14 Jan 2016
China is ripping us on trade. They're devaluing their currency and they're killing our companies. Thousands of thousands we've lost because of China.
We've lost anywhere between four and seven million jobs because of China. We have very unfair trade with China. We're going to have a trade deficit of 505 billion dollars this year with China." A lot of that is because they devalue their currency.
We have great power, economic power over China. If they don't start treating us fairly and stop devaluing and let their currency rise, I would certainly start taxing goods that come in from China. They can't believe how stupid the American leadership is.
Donald is right that China is running over President Obama like he is a child.
Wall Street sinks as China turmoil hits global shares
07 Jan 2016
Wall Street shares closed sharply down after the suspension of trading on Chinese markets for the second time this week spread alarm among investors. The slump on Chinese markets prompted renewed panic on global markets. Share dealing was halted in the first 30 minutes, making it China's shortest trading day on record. China is responsible for 17% of all the world's economic activity, it is the second largest economy and the second largest importer of both goods and commercial services. Investors are nervous after the Chinese central bank moved to weaken the country's currency, the yuan, for the eighth day running, sparking fears of a currency war. This move is designed to boost exports by making Chinese goods cheaper outside the country. There is now a lot more pressure on other Asian countries to depreciate their currencies in response to China's move. Legendary US billionaire investor George Soros has warned that 2016 could see a global financial crisis on as big a scale as that seen just eight years ago.
IMF reforms clear last hurdle with US adoption
19 Dec 2015
19 Dec 2015
The US Senate has adopted long-awaited reforms to give emerging economies a greater say in how the International Monetary Fund (IMF) is managed. China's voting rights will rise to 6%, from 3.8%. This is the biggest shake-up since the IMF and the World Bank were set up to manage the post-World War Two economy. China has set up the Asian Infrastructure Investment Bank as an alternative to the IMF and the WB. As China's voting rights rise, the US will see its share drop from 16.7% to 16.5%. India's voting rights will rise to 2.6% from the current 2.3%. The biggest losers are European economies which will see their voting rights diminished. The IMF now includes China's currency as a reserve currency, alongside the US dollar, the euro, the yen and the British pound.
China and South Africa in $6.5bn worth of deals
China and South Africa have signed deals and loans valued at $6.5bn (£4.3bn), with the focus on building infrastructure in the African giant. The deals were announced during a four-day visit by Chinese President Xi Jinping to increase trade and investment between the two countries. About 26 deals were signed on Wednesday, with $2.5bn going to South Africa's state-owned rail operator. China has given a series of loans to African countries for development. The countries, in turn, provide oil and other key commodities to the world's second largest economy.
China's yuan set for IMF reserve status
30 Nov 2015
The International Monetary Fund (IMF) is expected to announce on Monday that China's currency, the yuan, will join the fund's basket of reserve currencies. Just the US dollar, the euro, Japan's yen and the British pound are currently part of this select band. The yuan will now make up part of the IMF's Special Drawing Rights - an asset created by the IMF which serves almost as a currency. More than anything this move is a symbol - a powerful one - of China's meteoric rise, from poverty to pillar of the global economy. The yuan will become one of the top three major international currencies, together with the dollar and the euro. Concerns about Beijing keeping the yuan artificially low to help exporters is one reason the currency has previously failed to meet the criteria for reserve currencies set out by the IMF.
China devalues yuan currency to three-year low
11 Aug 2015
China's central bank has devalued the yuan to its lowest rate against the US dollar in almost three years. The move, which makes exports cheaper, comes after weak economic data from the world's second largest economy. Washington has in the past complained that China uses its currency for competitive advantage. Senator Chuck Schumer: "For years, China has rigged the rules and played games with its currency.'' "The question on everyone's mind is whether this is the awakening of the dragon ushering in a new global currency war?" Angus Nicholson, market analyst with trading firm IG.
Brics countries launch new development bank in Shanghai
21 Jul 2015
The Brics group of emerging economies on Tuesday launched its New Development Bank (NDB) in Shanghai. The bank is backed by Brazil, Russia, India, China and South Africa - collectively known as Brics countries. The NDB will lend money to developing countries to help finance infrastructure projects. The bank is seen as an alternative to the World Bank and the International Monetary Fund. The biggest contributor will be China, which also led the establishment of another new international bank, the Beijing-based Asian Infrastructure Development Bank.
China-led AIIB development bank holds signing ceremony
29 Jun 2015
China has hosted the signing ceremony of the Asian Infrastructure Investment Bank (AIIB), a new international financial institution set to rival the World Bank and Asian Development Bank. Delegates from 50 countries signed articles that determine each member's share and the bank's initial capital. The UK, Germany, Australia and South Korea are among the founding members. Japan and the US, which oppose the AIIB, are the most prominent countries not to join.
Australia to join China-led AIIB as founding member
24 Jun 2015
Australia has said it will join a China-led infrastructure bank as a founding member, contributing 930m Australian dollars ($718.5m; £455m) over five years. The move will make Australia the sixth biggest shareholder of the Asian Infrastructure Investment Bank (AIIB). More than 50 members have signed up to the lender, which is widely seen as a rival to the Western-led World Bank. The UK, France, Germany and Iran are among its members. The US and Japan have refused to join, however.
Russia: Farmer's 'village currency' lands him in court
05 Jun 2015
A Russian farmer has ended up in court after he began printing an alternative local currency for his village. Mikhail Shlyapnikov says he created the "kolion" - named after the village of Kolionovo, near Moscow - as a light-hearted form of IOU for barter trades between farmers. The rate is fixed at five kolions for a bucket of potatoes. But local prosecutors and the Russian Central Bank have taken him to court to have the kolion declared illegal, saying it's a threat to Russia's sole legal currency, the ruble.
IMF calls on China to allow greater currency flexibility
07 May 2015
The International Monetary Fund (IMF) has said China should continue to provide "greater flexibility" in its exchange rate policy as the country continues to see slower growth. It did not label the country as a currency manipulator, however, the US said further appreciation was needed as the mainland continued to see productivity growth greater than its major trading partners. It said the reforms were critical to sustainable growth.
France and Germany join UK in Asia bank membership
17 Mar 2015
France and Germany are to join the UK in becoming members of a Chinese-led Asian development bank. Last week, the US issued a rare rebuke to the UK over its decision to become a member of the AIIB. The US considers the AIIB a rival to the Western-dominated World Bank. It is believed Italy also intends to join. Some 21 nations came together last year to sign a memorandum for the bank's establishment, including Singapore, India and Thailand.
UK support for China-backed Asia bank prompts US concern
13 Mar 2015
The US has expressed concern over the UK's bid to become a founding member of a Chinese-backed development bank. The UK is the first big Western economy to apply for membership of the Asian Infrastructure Investment Bank (AIIB). The AIIB, which was created in October by 21 countries, led by China, will fund Asian energy, transport and infrastructure projects. The US sees the Chinese effort as a ploy to dilute US control of the banking system, and has persuaded regional allies such as Australia, South Korea and Japan to stay out of the bank.
Russia's credit rating is cut to junk by S&P
26 Jan 2015
Russia’s credit rating has been cut to junk – or below investment grade – by US ratings agency Standard and Poor’s for the first time in a decade. S&P gave Russia a rating of BB+, which puts it at the same level as Indonesia and Bulgaria. Russia’s economy is expected to contract by 4% to 5% this year. The ruble dropped even further against the dollar in the wake of the announcement, falling 7.5% in late trading in Moscow. The currency has depreciated over 40% against the dollar in the past year.
Denmark acts over fallout from Swiss currency turmoil
19 Jan 2015
Denmark has cut its key interest rate in the wake of Switzerland's decision to scrap the franc's peg to the euro. There has been speculation that Denmark could follow the Swiss move by removing the krone's link to the euro. Denmark cut its deposit rate to minus 0.2% from minus 0.05%. The lending rate was cut from 0.2% to 0.05%. Denmark first imposed negative rates in 2012, meaning that depositors effectively had to pay to keep their money with the central bank.
Russian ruble falls to new low against US dollar
15 Dec 2014
The Russian ruble has dropped to a new low against the US dollar, as falling oil prices and Western sanctions continue to weigh on the country. As of Monday afternoon, it takes more than 60 rubles to buy a single dollar. The 60 mark is considered a "psychological barrier" for Russia's national currency. Since the start of the year, the ruble has lost more than 45% of its value against the dollar. Russia's central bank efforts have been overwhelmed by the fall in the price of crude oil.
ISIS announces new currency
13 Nov 2014
ISIS is planning to mint its own currency in gold, silver and copper, the group said Thursday. Its aim is to stay away from the "tyrant's financial system," ISIS said in a statement. The currency will include seven coins: two gold, three silver and two copper. The move will remove Muslims from the "global economic system that is based on satanic usury," ISIS said.
Russian ruble weakens on debt downgrade
20 Oct 2014
The Russian ruble has weakened further against the dollar following a downgrade of the country's debt rating by the ratings agency Moody's. On Friday, Moody's cut its rating of Russian debt to Baa2, its second-lowest investment grade. In a statement, Moody's said: "The tightening of sanctions against Russia has already begun to aggravate the slowdown in economic growth and to undermine consumer and investor confidence in the country. Moody's expects growth to turn negative at the end of this year and to continuing decline until "at least mid-2015".
Why is Britain issuing debt denominated in renminbi?
09 Oct 2014
Britain is in the process of issuing a government bond denominated in the Chinese renminbi (RMB), making it the first country (aside from China, of course) in the world to do so. Britain will use the proceeds to finance its reserves, which currently consists of only US dollars, euros, yen and Canadian dollars, according to HM Treasury. The UK isn't the first country to hold RMB in its reserves, as central banks largely in emerging markets have also begun to do so. It is an important step on the path toward the rise of the RMB as an internationally used currency.
China's President Xi Jinping signs Venezuela oil deal
21 Jul 2014
Chinese President Xi Jinping has signed a series of oil and mineral deals with Venezuela. The agreements came on the latest stop of a four-country visit to Latin America. Mr. Xi has already signed key deals in Argentina and Brazil. He has now departed from Venezuela and will visit Cuba next. In Argentina the Chinese leader agreed to an $11bn currency swap providing much needed money for the government of President Cristina Fernandez de Kirchner. Mr Xi also helped launch a new development bank alongside the other emerging powers of the Brics group - Brazil, Russia, India and South Africa - at a summit in Brazil. The new bank is intended to create an alternative to the Western-dominated World Bank. Chinese trade with Latin America has grown rapidly. It is now the second-largest trading partner in Argentina and Cuba, and has been Brazil's largest since 2009. China is the second-largest market for Venezuelan oil after the United States.
Brics nations to create $100bn development bank
15 Jul 2014
The leaders of the five Brics countries have signed a deal to create a new $100bn (£58.3bn) development bank and emergency reserve fund. The Brics group is made up of Brazil, Russia, India, China and South Africa. Despite their political and economic differences, the one thing these countries do agree upon is that rich countries have too much power in institutions like the World Bank and the IMF. The creation of the Brics bank will almost surely create competition for both the World Bank and other similar regional funds. Brics nations have criticized the World Bank and the International Monetary Fund for not giving developing nations enough voting rights.
China and Greece sign deals worth $5bn during Li visit
21 Jun 2014
China and Greece have signed business deals worth about $5bn (£2.9bn) during Chinese Premier Li Keqiang's visit. Deals signed covered areas including exports and shipbuilding. China also showed an interest in buying railways and building an airport in Crete. China is eager to take a majority stake in the Piraeus port. A Chinese company already runs two piers at the port. Greece is keen to attract foreign investment to reduce its national debt and high unemployment rate. Not all Greeks are delighted: the opposition says the government is selling the family silver on the cheap.
Russia's credit rating downgraded by S&P
25 Apr 2014
Credit ratings agency Standard & Poor's has cut Russia's rating to one notch above "junk" status. S&P said: "In our view, the tense geopolitical situation between Russia and Ukraine could see additional significant outflows of both foreign and domestic capital from the Russian economy." The agency said this could "further undermine already weakening growth prospects". The move comes as foreign investors continue to take money out of the country amid tensions over the situation in Ukraine. Investors have been pulling money out of Russia since last year when the country's economy ran into trouble, but this process has intensified in recent weeks amid concerns over Ukraine.
US tells China it must allow its currency to strengthen
15 Apr 2014
The US has told China its currency must be allowed to rise if it and the global economy are to see stable growth. The US Treasury's twice-yearly report to policymakers says the yuan is "significantly undervalued". China had allowed the yuan - also known as the renminbi - to rise, but the report said this had not gone far enough. It also noted that "China has continued large-scale purchases of foreign exchange in the first quarter of this year, despite having accumulated $3.8 trillion in reserves, which are excessive by any measure."
Bank of England agrees Chinese London currency clearing hub
26 Mar 2014
The Bank of England has agreed a deal with the People's Bank of China to make London a hub for Chinese currency dealing. 62% of yuan payments outside of China already take place in London. Last year the UK and Chinese central banks signed a three-year currency swap arrangement worth 200bn yuan which allows them to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars.
Direct currency trading begins with New Zealand
19 Mar 2014
China and New Zealand announced a landmark deal on Tuesday that allows the direct trading of the two countries' currencies. The deal, which takes effect on Wednesday, ends the need for companies and currency traders to convert Chinese yuan or New Zealand dollars into a third currency, usually US dollars, when making or receiving payments. New Zealand's currency is the sixth to be granted direct-trade status, after the US dollar, Japanese yen, Australian dollar, Russian ruble and Malaysian ringgit.
Global markets steady as Ukraine impact fears ease
04 Mar 2014
Russia threatened to abandon the US dollar as the country's reserve currency. The IMF is currently in Ukraine to assess the economy and begin negotiations over a potential bailout. The interim Prime Minister, Arseny Yatsenyuk, has said Ukraine will accept whatever conditions the IMF seeks. Kremlin economic aid Sergei Glazyev said that if the US imposed sanctions, Russia would figure out a way to use a new payment system that was not reliant on US dollars for international transactions.
Russian ruble hits new low against the dollar and euro
03 Mar 2014
Russia's ruble has fallen to a fresh all-time low against both the dollar and the euro after the political turmoil in Ukraine intensified. The ruble fell 2.5% to 36.5 rubles against the dollar and 1.5% against the euro to 50.30.Stocks on Moscow's MICEX main stock index also fell more than 11%. The G7 nations of Canada, France, Germany, Italy, Japan, the UK and the US said they were ready "to provide strong financial backing to Ukraine".
Luxembourg's challenge to London over China's yuan
03 Mar 2014
The yuan, which is also known as the renminbi, is not really available outside mainland China. But this is changing. China is allowing more and more places to trade in its very tightly controlled currency. Hong Kong, London and Singapore have each been given quotas allowing banks based in these cities to trade in the currency. London, Frankfurt, Paris and especially Luxembourg all want a large slice of the growing Chinese currency pie.
Ukraine's failing economy: Who is to blame?
10 Feb 2014
Ukraine's national currency, the hryvnia, has plunged to its lowest official level against the US dollar since its inception nearly 18 years ago. After weeks of intervention on the currency markets in an attempt to keep the currency stable, Ukraine's Central Bank last Thursday cut the exchange rate and imposed capital controls. Ukrainian officials blame the devaluation of the national currency on the mass protests and an economic slowdown in developing countries. Observers see the hryvnia's fall as a natural result of several years of poor economic policy, a rising trade and budget deficit, 18 months of recession and mounting foreign debt.
Wall Street slides on currency woes
24 Jan 2014
Stocks on Wall Street fell sharply on Friday as jitters in emerging markets spooked investors. In New York, the Dow Jones fell 318.24 points, just shy of 2%. On Thursday, Argentina abandoned efforts to defend the peso, and it fell 11% against the US dollar. Other emerging market currencies have also fallen, and nerves spread to European stock markets on Friday.
China and ECB sign $57bn currency swap deal
11 Oct 2013
China and the European Central Bank have signed a currency swap agreement worth 350bn yuan ($57bn; £36bn), state-owned Xinhua news agency has said. Such agreements mean the central banks can exchange currencies and firms can settle trade in local currencies rather than in US dollars. The deal is one of the largest for China as it looks to build a more international role for the yuan.
UK and China in £21bn currency swap deal
23 Jun 2013
The Bank of England and its Chinese counterpart have signed a deal likely to boost trade between the UK and China in the yuan. The Bank and the People's Bank of China have signed a three-year currency swap arrangement worth 200bn yuan (£21bn, $33bn). The UK is looking to become a center for the Chinese currency. Currency-swap agreements allow firms to settle trade in local currencies rather than in US dollars. Beijing has been using these pacts as part of its push for a more global role for the yuan. It has a swap agreement with Brazil worth $30bn and similar agreements with Japan, Australia and Hong Kong.
US targets Iranian currency with fresh sanctions
03 Jun 2013
The US has unveiled fresh sanctions against Iran, targeting its currency, as it increases the pressure on Tehran to abandon its nuclear program. These include penalties on anyone facilitating "significant" transactions in the rial or holding significant amounts of the currency outside Iran. A US official said the move would force institutions to dump rial holdings and weaken the currency further. This is the first time the US has directly targeted the Iranian currency.
China and Australia in currency pact
09 Apr 2013
The move is seen as a significant step in China's push for a more international role for its currency. Beijing is trying to promote the yuan as an alternative to the US dollar's role as a global reserve currency. China is the biggest buyer of Australia's natural resources such as iron ore. But with no mechanism in place to directly convert between the Australian dollar and the Chinese yuan, the two countries have long used the US dollar as a trading currency. Until now, companies had to first convert their respective home currencies into the US dollar, before exchanging into the yuan or the Australian dollar.
China and Brazil sign $30bn currency swap agreement
26 Mar 2013
China and Brazil have signed a currency swap deal. The pact, first announced last year, will allow their central banks to swap local currencies worth up to 190bn yuan or 60bn reais ($30bn; £20bn). Along with being the world's second-largest economy, China is also Brazil's biggest trading partner, driven by growing Chinese demand for Brazil's resources, such as iron ore and soy products. China has been pushing for a more international role for its currency, the yuan. It has been trying to promote the yuan as an alternative to the US dollar as a global reserve currency.
BOJ nominee Haruhiko Kuroda promises to beat deflation
04 Mar 2013
Haruhiko Kuroda, nominated to be the next head of Japan's central bank, has promised aggressive steps to raise inflation to 2%, an aggressive ultra-easy monetary policy will pump more money into the economy and also weaken the yen. Japan's economy has struggled with deflation for many years, seen as a challenge to sustainable growth. The weaker Japanese currency would boost exports and help spur economic growth. But there are fears that a prolonged and deliberate weakening of the Japanese yen could spark a currency war, if other countries that trade or compete with Japan were to also take steps to devalue their currency, in order to gain a trade advantage.
UK and China poised for currency swap deal
22 Feb 2013
The Bank of England is in negotiations with its Chinese counterpart on a deal likely to boost trade between the UK and China in the yuan. The UK is looking to become a center for the Chinese currency, also known as the renminbi. Such agreements allow central banks to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars, as happens now, since China's currency is not fully convertible to other currencies. China has been gradually relaxing strict controls on the value of its currency and on flows of capital. It has a swap agreement with Brazil worth $30bn and has also signed similar agreements with other trading partners such as Japan, Australia and Hong Kong.
G20 leaked communiqué doesn't single out Japan
15 Feb 2013
The weak yen gives Japan's exporters a price advantage, raising fears of a "currency war" - competitive devaluations by other big exporters. Industrialized economies such as the US and eurozone have expressed unease that the weaker yen, which gives Japan a competitive advantage, could be used as an excuse by other exporter nations to intervene directly in the currency markets in order to weaken their own currencies. Such "beggar-thy-neighbour" policies might leave convertible currencies such as the dollar, euro and pound painfully overvalued. Recent data showed that, like in Japan, the eurozone recession also deepened more than expected in the final three months of 2012.
Yen jumps after G7 clarifies currency statement
12 Feb 2013
The yen has jumped against major currencies after an official representing the G7 rich nations clarified a statement it had made on the currency markets. This week the talk of "currency wars" has been inflamed as France expressed concern at the strength of the euro. Japan's Prime Minister - Shinzo Abe - has been trying to kick-start the country's economy since being elected last December. He wants to get domestic prices rising and has taken action to weaken the yen.
Venezuela devalues currency by 32% against the dollar
08 Feb 2013
Venezuela has cut the value of its currency against the US dollar by 32%, in an effort to boost its economy. This is the fifth devaluation of the bolivar since Hugo Chavez' administration started controlling the exchange rate, in 2003. Strict controls to prevent currency going out of the country mean that dollars are normally hard to get in Venezuela. Dollars have been trading at four times the official rate on the black market. In a country that largely depends on food imports, the scarcity of dollars also led to shortages of products such as sugar and flour.
Egypt foreign currency reserves fall again
05 Feb 2013
Egypt's dwindling foreign currency reserves fell 10% in January, according to the country's central bank. The bank said reserves fell by $1.4bn during the month from $15bn to $13.6bn amid continued political unrest and violent street protests. The figures again raise concerns over the state of Egypt's economy and the government's finances. In the last two weeks, violent protests have again erupted in Cairo and other cities. Egypt is also in talks with the European Union over a $900m loan, along with smaller loans from the US and the African Development Bank.
US says China not a currency manipulator
27 Nov 2012
The US has decided not to declare China as having manipulated its currency to gain an unfair trade advantage. But the Treasury did say that China's currency, the yuan, remains "significantly undervalued" and urged China to make further progress. In its semi-annual report, it said Beijing did not meet the criteria to be called a currency manipulator, which could have sparked US trade sanctions. The issue of whether China manipulates its currency is an important political issue and an ongoing source of tension between the world's two biggest economies. Defeated US presidential candidate Mitt Romney had said he would have branded China a currency manipulator on his first day in office.
Hong Kong weakens local currency again
24 Oct 2012
Hong Kong's central bank has intervened in financial markets again, weakening the value of its currency after it jumped in value. Weak economic conditions in the US and Europe have prompted many investors to look for better-performing assets in markets such as Hong Kong. The bank said that it may have to keep intervening to keep its currency cheap. Critics have argued that by being linked to the US dollar, Hong Kong's monetary policy is heavily influenced by that of the US.
Third Presidential Debate
22 Oct 2012
We then organized the strongest coalition and the strongest sanctions against Iran in history, and it is crippling their economy. Their currency has dropped 80 percent.
I’ve watched year in and year out as companies have shut down and people have lost their jobs because China has not played by the same rules, in part by holding down artificially the value of their currency; it holds down the prices of their goods. That's why on day one I will label them a currency manipulator. You can't keep on holding down the value of your currency, stealing our intellectual property, counterfeiting our products, selling them around the world -- even into the United States.
Second Presidential Debate
16 Oct 2012
China has been a currency manipulator for years and years and years. And the president has a regular opportunity to label them as a currency manipulator but refuses to do so. On day one, I will label China a currency manipulator.
And as far as currency manipulation, the currency's actually gone up 11 percent since I've been president because we have pushed them hard.
Iran police clash with protesters over currency crisis
03 Oct 2012
Tear gas was used to disperse the demonstrators, some of whom were setting fire to tires and rubbish bins. Amateur video footage show hundreds of people marching towards Iran's central bank. The rial has plummeted to record lows against the US dollar in recent days. The government had closed the currency exchange shops, hoping to curtail the turmoil. Hundreds of police are also reported to have rounded up and arrested illegal moneychangers in the capital.
Iran rial: Mahmoud Ahmadinejad blames slide on 'enemies'
02 Oct 2012
Iranian President Mahmoud Ahmadinejad has blamed the "enemies" of his country for the sharp falls in its currency, the rial. The currency has fallen to fresh record lows against the US dollar. The rial plunged 18% in Monday's trading and then another 9% on Tuesday. The rial has lost more than 80% of its value since 2011 because of US-led trade sanctions. US officials say the slide reflects the success of US economic sanctions targeted at Iran's controversial nuclear program. Mr. Ahmadinejad said Western sanctions amounted to an economic war. The US has also threatened to take action against foreign firms and institutions dealing with the Iranian central bank.
China proposes $10bn loan for Latin America countries
26 Jun 2012
China has offered to set up a $10bn (£6.4bn) credit line for Latin American countries to support infrastructure projects in the region. They explained that Latin American nations could benefit from Beijing's expertise, while Chinese firms may play a big role in developments of these projects. Along with increased trade, Premier Wen also pushed for currency swap agreements with the region's economies. The agreements allow respective central banks to swap currencies and can be used by firms to settle trade in local currencies rather than in US dollars. Beijing has been using these pacts as part of its push for a more global role for its currency, the yuan.
China and Brazil in $30bn currency swap agreement
22 Jun 2012
China and Brazil have agreed a currency swap deal in a bid to safeguard against any global financial crisis and strengthen their trade ties. The agreement is the latest in a series of similar deals signed by China with its trading partners. Analysts said that Beijing has been trying to push for trade to be settled in yuan, rather than in US dollars, as part of its plans to seek a more global role for its currency. "The motivation is to be less reliant on the US dollar," Sean Callow, chief currency strategist at Westpac, told the BBC.
Hong Kong debates its currency's peg to the US dollar
20 Jun 2012
Over the past 30 years, Hong Kong's currency has been pegged to the US dollar at a rate close to 7.8 - making $10 equal to HK$78. Prof Joseph Yam, the former head of the Hong Kong Monetary Authority (HKMA), recently published a working paper suggesting a review of the dollar peg. Hong Kong's top officials have all publicly announced their support for the US dollar peg in response to the academic paper.
China and Japan to start direct yen-yuan trade in June
28 May 2012
China will allow direct trading of the yuan and the Japanese yen, in a move aimed at promoting trade between Asia's two biggest economies. This means the two countries will not be using the US dollar as an intermediary. China, which sometimes has a tense relationship with Japan, is the country's biggest trading partner. This is the first time China has let a major currency other than the US dollar trade directly with the yuan.
China buying oil from Iran with yuan
08 May 2012
China is buying crude oil from Iran using its currency the yuan, an Iranian diplomat has said. Oil transactions are usually settled in dollars but US sanctions make it difficult for Iran to accept payments in the US currency. China is the biggest buyer of Iranian crude oil exports. China has been providing the currency to Iran via Russian banks rather than its own domestic banks.
Timothy Geithner calls for China to alter growth policy
02 May 2012
US Treasury Secretary Timothy Geithner has urged China to change its export-led growth policy and focus on increasing domestic consumption. Mr. Geithner also called for China to allow further appreciation of its currency. US policymakers argue that it is still undervalued.
HSBC to raise money in Chinese currency in London
18 Apr 2012
HSBC is to raise money in London in the Chinese currency, becoming the first business to issue a benchmark bond outside mainland China or Hong Kong. Chancellor George Osborne has said it is a step towards London being the top Western trading hub in the yuan, also called the renminbi. China is taking steps to make the yuan a global, convertible currency.
China eyes freer financial markets to boost yuan role
04 Apr 2012
China is looking to increase investment and competition in its financial and banking sectors. The shift may boost growth and create a more international Chinese currency. Analysts have long said that opening up its financial markets was key to Beijing's efforts of pushing the yuan as an alternative to the US dollar as a global reserve currency.
China signs $31bn currency exchange deal with Australia
22 Mar 2012
China and Australia have signed a currency swap agreement in a bid to promote bilateral trade and investment. It will allow for the exchange of local currencies between their central banks, China has been trying to promote the yuan as an alternative global reserve currency to the US dollar. It has signed currency deals with many of its trading partners, including Hong Kong and Japan. Analysts said the latest deal with Australia, which is one of the biggest supplier of minerals and natural resources such as coal and iron ore to China, is a major step in Beijing's quest for a global role for its currency.
US Senate backs debate on currency law amid yuan row
03 0ct 2011
The US Senate has voted in favor of debating laws which could pressure China to let its currency rise in value. The bill would give the US government the power to add tariffs to goods imported from countries deemed to be undervaluing their currencies to boost exports. Some politicians and trade groups say China uses its currency in such a way. China's official news agency described the vote as a "publicity attempt".
Bric summit ends in China with plea for more influence
14 Apr 2011
The leaders of Brazil, Russia, India, China and South Africa said the recent financial crisis had exposed the inadequacies and deficiencies of the current monetary order, which has the dollar as the world's most-used currency. The four nations have 40% of the world's population and almost a fifth of the world's growth. These countries are worried about the long-term direction of the dollar because of the US's large trade and budget deficits. China has been diversifying into euros to reduce its dependency on the value of the dollar. The development banks of the five nations agreed in principle to establish mutual credit lines denominated in their local currencies.
Sarkozy in China for G20 talks but yuan not on agenda
30 Mar 2011
French President Nicolas Sarkozy will convene a meeting of some of the biggest names in world finance in Nanjing, China on Thursday. The gathering will take place under the auspices of the G20 and will aim to smooth out global currency issues. It is the first time China has hosted a G20 event. Other heavy hitters from the world of international finance will be there, including US Treasury Secretary Timothy Geithner, European Central Bank Governor Jean-Claude Trichet, UK Chancellor George Osborne and the head of the International Monetary Fund (IMF), Dominique Strauss-Kahn.
US looks for friends in fight against undervalued yuan
08 Feb 2011
China's currency is back in the spotlight amid reports that the US has sought to increase the number of countries pushing for a stronger yuan. During a visit to Brazil, US Treasury Secretary Timothy Geithner discussed the manipulation of currency values. He urged Brazil to put pressure on China to allow the yuan to appreciate. The US argues a weak currency gives China an unfair advantage in global trade, keeping Chinese exports at artificially low prices.
China's Hu Jintao: Currency system is 'product of past'
17 Jan 2011
Chinese President Hu Jintao has said the international currency system dominated by the US dollar is a "product of the past". Mr. Hu also said China was taking steps to replace it with the yuan, its own currency, but acknowledged that would be a "fairly long process". Three Democratic senators announced they would introduce a new bill to increase penalties the US considers to be "currency manipulators".
Brazil Finance Minister Mantega warns of trade war
09 Jan 2011
Brazil has warned that the world is on course for a trade war because of what it says is currency manipulation by China, the US and others. "This is a currency war which is turning into a trade war," Mr. Mantega said. The International Monetary Fund warned in October that some countries appeared to be trying to use their currencies "as a weapon".
World Bank issues bond denominated in Chinese yuan
05 Jan 2011
The World Bank has issued its first bond denominated in the Chinese currency, joining a small but fast-growing market. The yuan-denominated bond is being issued to promote the use of the Chinese currency in international markets. Other bodies, including the Asian Development Bank, and firms such as McDonald's and Caterpillar have issued yuan bonds. China's stake in the World Bank, which gives financial and technical assistance to developing countries, is set to increase.
China backs Spain in new eurozone support
05 Jan 2011
The Chinese Vice Premier has reaffirmed his country will buy Spanish government bonds, despite the recent crisis of market confidence over eurozone debt. China has the largest amount of foreign currency reserves in the world.
China, Germany and South Africa criticize US stimulus
05 Nov 2010
Germany, China, Brazil and South Africa have criticized US plans to pump $600bn (£373bn) into the US economy. German Finance Minister Wolfgang Schaeuble said the US policy was "clueless" and would create "extra problems for the world". China's Central Bank head Zhou Xiaochuan urged global currency reforms.
US delays China 'currency manipulator' report
16 Oct 2010
The US government has delayed a report - which was expected on Friday - that could officially brand China a "currency manipulator". It has so far held back from naming China. The report is not now expected until after an upcoming G20 summit. China said the US should not use the weak yuan as a "scapegoat" for its own economic problems.
IMF chief's warning of currency war 'real threat'
07 Oct 2010
Global currency wars pose "a real threat" to economic recovery, the head of the International Monetary Fund, Dominique Strauss-Kahn, has warned. Mr. Strauss-Kahn told the BBC that there were signs that countries were trying to use their currencies "as a weapon". In recent weeks both the US and Europe have led criticism of China over its undervalued yuan. Meanwhile, Japan has been forced to intervene to curb rises in the yen. Separately, Indian Finance Minister Pranab Mukherjee warned that imbalances in the global economy have become "not sustainable".
EU takes on Chinese currency
05 Oct 2010
The European Union is riding in the middle of an escalating currency spat between China and the United States, perceived by many in Beijing as a smokescreen for Washington's efforts to sap China's growth and contain its rise. The US House of Representatives voted overwhelmingly last week to punish China for its currency policies that favor unfairly Chinese exports at the expense of the United States and other countries. Beijing suspects the US is keen on implementing a Plaza Accord scenario that back in the mid-1980s forced the Japanese yen to jump almost 60% in a year, undermining Japanese growth and resulting in a two-decade property slump and stagnation for Asia's once most vibrant economy. Tan Yaling, head of the China Forex Investment Research Institute, says the pressure on Chinese currency is only a "chapter in the US's plan of war on all currencies."
Currency 'war' warning from Brazil's finance minister
28 Sep 2010
An "international currency war" is underway, Brazil's finance minister, Guido Mantega, has warned. His comments follow a series of interventions by governments to weaken their currencies and boost export competitiveness. Japan, South Korea, and Taiwan are among those that have recently tried to cut the value of their currencies.
US Treasury Secretary Geithner says yuan is undervalued
16 Sep 2010
The US Treasury Secretary, Timothy Geithner, says China's currency is significantly undervalued. Some members of the committee have called China a currency manipulator. He hinted that the US was preparing to apply pressure on the nation to force it into allowing faster appreciation.
China currency stance 'impeding reforms', says Geithner
10 June 2010
Global economic reforms are being impeded by China's refusal to revalue its currency, the yuan, US Treasury Secretary Timothy Geithner has said. He told the US Senate Committee on Finance that distortions caused by China's stance were "an impediment to the global rebalancing we need".
China-US talks: China vows more currency reform
24 May 2010
The currency is top of the economic agenda. The US argues that the yuan is deliberately undervalued, giving Chinese exporters an unfair advantage in global markets. Some analysts argue that the yuan is currently undervalued by as much as 40%.
US Treasury delays China currency report
03 Apr 2010
The US Treasury is delaying by several months a report on whether China manipulates its currency, the yuan. Treasury Secretary Tim Geithner said he would delay the report, which was due out on 15 April, until after a series of high-level international meetings.
Barack Obama urges China to relax grip on its currency
11 Mar 2010
President Barack Obama has urged China to change its currency strategy, a move that would effectively raise the value of the yuan and benefit US exporters. Mr Obama said in a speech to the Import-Export Bank's annual conference that China should move to a "more market-oriented exchange rate". The US Treasury Department is considering whether to label China a "currency manipulator" in a report due on 15 April.
Indonesian group prefers gold to dollars
20 Feb 2010
Guided by a Scottish-born convert to Islam, a group of devout Indonesian Muslims is shunning "worthless" paper money in favor of gold and silver coins for their daily transactions. The followers of Sheikh Abdalqadir as-Sufi -- born Ian Dallas -- trade goods such as food, medicine, clothes and phone cards with gold dinars and silver dirhams in line with a strict interpretation of Islamic law. Their anti-modern views sit uneasily with the naked capitalism of Indonesia's teeming capital, the financial and political center of one of the fastest growing economies in the world.
Foreign demand for US debt drops by record amount
16 Feb 2010
Foreign demand for US Treasury bonds and notes fell by a record amount in December as China reduced its holdings. The Treasury said foreign holdings of US debt dropped by $53bn, surpassing the previous record set last April. China cut its holdings by $34.2bn - meaning it is now the second-biggest US debt holder after Japan. China has questioned whether the US bonds are safe and whether it can sustain its deficits. It has also questioned the US dollar's role as the world's reserve currency.
China hits back at US over trade and currency
04 Feb 2010
China has hit back at the US a day after President Barack Obama promised to take a tougher line with Beijing over currency and trade. Chinese foreign ministry spokesman Ma Zhaoxu insisted the value of the Chinese yuan was not the main reason for China's trade surplus with the US.
LatAm leftists tackle dollar with new currency
17 Oct 2009
Leftist Latin American leaders agreed on the creation of a regional currency, the Sucre, aimed at scaling back the use of the US dollar. Nine countries of ALBA met in Bolivia where they vowed to press ahead with a new currency for intra-regional trade to replace the US dollar. ALBA's member states are Venezuela, Bolivia, Cuba, Ecuador, Nicaragua, Honduras, Dominica, Saint Vincent and Antigua and Barbuda.
The demise of the dollar
06 Oct 2009
In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars. It augurs an extraordinary transition from dollar markets.
US dollar set to be eclipsed, World Bank president predicts
28 Sep 2009
The United States must brace itself for the dollar to be usurped as the world's reserve currency as American dominance wanes in the wake of the financial crisis, the World Bank president, Robert Zoellick, warned yesterday. Several countries, including China and Russia, have repeatedly raised what they see as the problem of excessive dollar hegemony.
China launches yuan trade scheme
06 Jul 2009
China has begun a trial scheme that allows trade with its neighbors to be settled with its own currency, the yuan, also known as the renminbi. Six Shanghai companies have signed contracts with counterparts in Hong Kong and Indonesia to settle deals in the currency.
China argues to replace US dollar
26 June 2009
China's central bank has reiterated its call for a new reserve currency to replace the US dollar. The report from the People's Bank of China (PBOC) said a "super-sovereign" currency should take its place "to avoid intrinsic shortcomings in using a sovereign currency as a reserve currency. The economic development model of debt-based consumption is most difficult to sustain." Russian President Dmitry Medvedev recently joined Mr Zhou in saying it was time to consider an alternative benchmark currency for international debt.
Dollar poses dilemma for Bric countries
15 Jun 2009
Brazil, Russia, India and China, collectively known as the Bric countries, are holding their first formal summit in the Russian city of Yekaterinburg. On the agenda is the role of the dollar and its status as the world's dominant currency. Fears that these big holders of dollar assets may be looking to switch from the US currency have unsettled financial markets and US politicians. These concerns have in part led to a decline in the dollar against other major currencies in recent months and sent jitters through the market for US government debt.
Will the US dollar remain king?
26 Mar 2009
The dollar's role as the world's dominant currency is coming under intense scrutiny. This week, China added its voice to demands for a new global currency as an alternative to the dollar in international trade and finance. China's central bank governor Zhou Xiaochuan called for a new reserve currency run by the International Monetary Fund. As the world's largest holder of dollars, China's comments cannot easily be dismissed. Should reserve managers begin to shift away from the dollar, it would have a "massive impact" on US markets.
Obama News Conference
24 Mar 2009
Question: Taking this economic debate a bit globally, senior Chinese officials have publicly expressed an interest in international currency.
Obama: So the goal at the G-20 summit, I think, is to do a couple of things. Number one, say to all countries: Let's do what's necessary in order to create jobs and to get the economy moving again. Let's avoid steps that could result in protectionism, that would further contract global trade. The steps that we've taken are ones that are restoring a sense of confidence and the ability of the United States to assert global leadership.
Question: (Off-mike) global currency?
Obama: I don't believe that there's a need for a global currency.
China suggests switch from dollar
24 Mar 2009
China's central bank has called for a new global reserve currency run by the International Monetary Fund to replace the US dollar. With the world's largest currency reserves of $2tn, China is the biggest holder of dollar assets. China has long been uneasy about relying on the dollar for trade and to store its reserves and recently expressed concerns that Washington's efforts to rescue the US economy could erode the value of the currency.
Iran leader dismisses US currency
18 Nov 2007
Iranian President Mahmoud Ahmadinejad has suggested an end to the trading of oil in US dollars, calling the currency "a worthless piece of paper".
Rapper Jay-Z dissing the dollar
16 Nov 2007
In an apparent nod to the low value of the dollar, rapper Jay-Z's new video Blue Magic features another currency. He is seen cruising the streets of New York in Bentleys and Rolls Royces with a briefcase of 500 euro notes.
Supermodel 'rejects dollar pay'
06 Nov 2007
The world's richest model has reportedly reacted in her own way to the sliding value of the US dollar - by refusing to be paid in the currency. Gisele Bündchen is said to be keen to avoid the US currency because of uncertainty over its strength.
Dollar Dropped in Iran Asset Move
18 Dec 2006
Iran is to shift its foreign currency reserves from dollars to euros and use the euro for oil deals in response to US-led pressure on its economy. In a widely expected move, Tehran said it would use the euro for all future commercial transactions overseas. Analysts said Tehran had been steadily shifting its foreign-held assets out of dollars since 2003 and that Monday's announcement was unlikely to affect the value of the dollar, which has weakened significantly in recent months.
Oil Producers Shun Dollar
11 Dec 2006
Oil producing countries have reduced their exposure to the dollar to the lowest level in two years and shifted oil income into euros, yen and sterling, according to new data from the Bank for International Settlements. The revelation in the latest BIS quarterly review, published on Monday, confirms market speculation about a move out of dollars and could put new pressure on the ailing US currency.
Venezuela 'may swap oil currency'
17 May 2006
Venezuela has hinted it could price its oil exports in euros rather than US dollars, further weakening its links to the US. President Hugo Chavez said he was considering taking the step following a similar declaration by Iran. Earlier this month, Iranian authorities gave backing for the launch of an oil exchange that traded solely in euros.
Rumored Iran Plan has Blogs Breathless
04 Apr 2006
Iran has a plan to destroy America, and it has nothing to do with the bomb. Instead, the Islamic republic will use oil and euros to slay the Great Satan, breathless accounts on the Internet warn. The attack will proceed as follows: Iran will open an oil trading exchange that operates in euros rather than dollars -- until now, the world's sole currency for buying crude. Other countries, whose central banks were holding onto dollars largely to buy oil, will dump their dollars en masse. The greenback's value will collapse. The American economy will tank. The U.S.-dominated New World Order will disappear in a flurry of currency trades. It has veered deep into the Web's netherworld of conspiracy theorists.
Syria Picks Euros Over Dollars
14 Feb 2006
Syria has switched all of the state's foreign currency transactions to euros from dollars amid a political confrontation with the United States. Duraid Durgham, the head of state-owned Commercial Bank of Syria, said on Monday: "Switching to the euro will help us avoid settlement problems in the United States.”
The Real Reasons Bush Went to War
08 Jul 2004
There were only two credible reasons for invading Iraq: control over oil and preservation of the dollar as the world's reserve currency. In 1999, Iran mooted pricing its oil in euros, and in late 2000 Saddam made the switch for Iraqi oil. In early 2002 Bush placed Iran and Iraq in the axis of evil. If the other Opec countries had followed Saddam's move to euros, the consequences for Bush could have been huge. Worldwide switches out of the dollar, on top of the already huge deficit, would have led to a plummeting dollar, a runaway from US markets and dramatic upheavals in the US.
Imperial Hubris by Michael Scheuer, 2004, Excerpts
Just under the noise, death, and rhetoric yielded by the foregoing episodes of war lies a largely ignored factor that may constitute al Qaeda’s main war effort – the steady bleeding of the U.S. economy. The immediate impact is massive expenditures – at all levels of American government – that will add permanently to the size and cost of government. The September 11 attacks were not apocalyptic onslaughts on Western civilization. They were country-specific attacks meant to inflict substantial, visible, and quantifiable human and economic destruction on America.