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Posts Tagged ‘currency’

State Bank goes after counterfeit currency

In Uncategorized on January 8, 2011 at 4:11 am

State Bank goes after counterfeit currency

QĐND – Saturday, January 01, 2011, 21:5 (GMT+7)

The State Bank of Vietnam (SBV) has approved a project to prevent the circulation of counterfeit money.

The 10 billion VND (500,000 USD) two-phase project will also help raise awareness among the public about security features on bank notes and how to identify counterfeit money.

In the first phase from 2010 to 2012, the project will focus on training banking staff, producing documents on the issue and conducting surveys.

In the second phase from 2013 to 2015, the project will provide further training to banking staff as well as treasury accountants and cashiers.

The project will also be broadcast through the mass media, with instructions on what to do if someone passes fake money and the methods counterfeit money dealers use to help prevent circulation in banks and the market.

Source: VNA

Source: QDND

S.Korea hopes to settle currency row at G20 summit

In Uncategorized on November 1, 2010 at 4:41 am

World trade chief says ‘concerned’ by currency interventions

In Uncategorized on October 31, 2010 at 11:11 am

EU treads uncharted waters to defend single currency

In Uncategorized on October 29, 2010 at 9:40 am

BRUSSELS (AFP) – The European Union faced a new round of risky treaty change Friday after its leaders agreed to embark on landmark reforms designed to wade off another financial crisis by shoring up the euro.

German Chancellor Angela Merkel speaks to media prior to a European Union summit at the European Council headquarters in Brussels. AFP

Sweeping reservations aside, the union’s 27 leaders wound up heated talks that dragged on into the early hours with an agreement to rewrite the EU’s main treaty only 11 months after it came into force.

“This spring we overcame a deep crisis of economic and monetary union,” said EU president Herman Van Rompuy, referring to the bail-out of Greece.

“Our next political duty was to draw the lessons for the future, to make the European economies more crisis-proof.”

Yielding to pressure from an “impassioned” German Chancellor Angela Merkel, leaders agreed to prepare a “limited” change to the hard-fought Lisbon Treaty, a decade in the making after fractious negotiations and failed referendums.

But diplomats warned before the ink was dry that the road even to light change could be rocky.

It will be “very difficult” to get a unanimous agreement on rewriting the treaty, one senior diplomat said.

“It’s mission impossible as there’ll be as many opinions on the subject as there are EU states.”

Germany, backed by France, demanded a rewrite of the Lisbon Treaty to enable it to back the creation of a permanent rescue fund enabling the union to rescue members in financial distress.

The agreement hammered out after seven arduous hours of talks agrees to establish the fund — known as a permanent crisis mechanism — to safeguard the financial stability of the euro area as a whole.

It invites Van Rompuy to undertake consultations on a limited treaty change required to that effect, with more talks set for a December summit and a final decision on “light” treaty change to come into force by mid-2013.

That is the expiry date for a temporary fund set up in May to reassure markets in the aftermath of the Greek crisis.

Germany contributed the lion’s share of eurozone commitments to the 440-billion-euro European Financial Stability Fund, but feared opposition from its powerful constitutional court to further aid failing a change in the EU’s Lisbon Treaty.

But some states fear that referendums in places like Austria or Ireland, whose Prime Minister Brian Cowen said it was “too early” to call, could unleash unintended damage.

Already both houses of parliament in London would have to ratify a change.

“Taxpayers should not be the only ones to shoulder the responsibility,” Merkel said of the type of perpetual rescue fund taking shape.

The treaty contains a clause banning members from bailing each other out.

Van Rompuy however said the clause would remain untouched — another would be changed instead.

Another German demand, for a suspension of voting rights for repeated debt and deficit offenders, was left hanging, to be faced afresh at a December summit.

Agreed economic reforms include tougher sanctions and stricter surveillance, even if penalties would be less severe than initially imagined.

For the first time, states would have to deposit monies with the EU, with the interest potentially withheld even before governments cross an existing three percent of gross domestic product threshold for annual deficits.

Another development would see sanctions applied to states whose overall, accumulated debt goes beyond 60 percent of GDP and who do not take steps sufficiently quickly to bring the level back down.

German Chancellor Angela Merkel speaks to media prior to a European Union summit at the European Council headquarters in Brussels.

Source: SGGP

Currency frictions as G20 powers meet

In Uncategorized on October 22, 2010 at 7:56 am

The world’s top finance officials convene in South Korea Friday, stalked by currency disputes that threaten to destabilise a fragile recovery from the global economic crisis.

G20 finance ministers and central bankers were to start a two-day meeting at 0645 GMT in preparation for a Seoul summit next month grouping leaders of nations at the heart of the forex row, including the US and Chinese presidents.

Ministers from the G7 industrialised nations were gathering in the southern city of Gyeongju, facing warnings that failure to rectify skewed patterns of economic growth could ignite trade protectionism.

US Treasury Secretary Timothy Geithner said this week he planned to use the meetings to promote efforts to “rebalance” the world economy so it is less reliant on US consumers, who are still reeling from the 2008 financial crisis.

The United States wants to establish “norms” on exchange-rate policy, and persuade other nations that it does not aim to devalue its way back to prosperity, he told the Wall Street Journal.

Japanese Finance Minister Yoshihiko Noda (C) speaks during a media briefing at a hotel before the G20 Finance Ministers and Central Bank Governors meeting in Gyeongju on October 22, 2010

With a super-loose US monetary policy weakening the dollar, major emerging G20 economies such as South Korea, Brazil and Indonesia have intervened in recent weeks to curb their own currencies and protect exporters.

But for the United States, which is in the full throes of election season, China lies at the root of the problem owing to its policy of keeping a firm lid on the yuan’s value to safeguard its humming export machine.

The verbal sparring has sparked warnings that the world could degenerate into an all-out “currency war” as rich powers and big emerging economies resort to unilateral action — undermining multilateral bodies such as the G20.

Japan’s Finance Minister Yoshihiko Noda said Friday that the G20 must “reaffirm” the need for more flexibility in emerging countries’ currencies during the talks in South Korea.

Apparently signalling they want a temporary truce, the G20 ministers will pledge to “refrain from competitive undervaluation” of their currencies, according to a draft statement obtained by Dow Jones Newswires.

The Group of 20 will “move towards (a) more market-determined exchange rate system”, the draft said, without spelling out how.

But the group would also minimise “adverse effects of excess volatility and disorderly movements in exchange rates” — apparently reflecting concerns of Asian and other export-reliant nations about rapid rises in their currencies.

“The only solution is dialogue: we should search together for coordinated measures to resume a more balanced global growth that encourages internal demand in some countries and brakes it in others,” French central bank chief Christian Noyer said in an interview with business daily Les Echos.

“There is agreement within the G7 for the greatest possible stability on the currency markets,” he was quoted as saying.

One idea pushed by the US administration is for exporting powerhouses such as China to limit their overall current-account surpluses, as a backdoor way of making them appreciate their currencies.

China this week surprised markets by raising interest rates to rein in accelerating inflation, but has shown little appetite for coordinated action to unshackle the yuan for fearing of driving exporting companies out of business.

And the US suggestion to target the current account appears to be getting short shrift from other G20 members, with Japan’s Noda calling it “not realistic”.

G20 ministers will also discuss reforms to give emerging nations more say at the International Monetary Fund, which is working on its own proposals to reform the global currency system.

The South Korean hosts are pushing for a global financial safety net to safeguard countries from the effect of sudden damaging capital flows, which have surged as the dollar has declined.

Also on the agenda are talks about tighter controls over mega-banks and finance firms blamed for triggering the world crisis.

The draft G20 statement said cooperation is essential to maintain a global recovery that is “moving ahead, albeit in a fragile and uneven way”.

Source: SGGP

Currency war threat looms over G20 ministers’ meeting

In Uncategorized on October 20, 2010 at 4:07 am

SEOUL, Oct 20, 2010 (AFP) – G20 finance ministers will meet in South Korea this week to try to chart a new direction for the world’s economy after a devastating downturn, but fears of a “currency war” could blow them off course.

The host nation dislikes the phrase — Finance Minister Yoon Jeung-Hyun has said the exchange rate issue is not “like a duel in a Western film”.

But South Korea admits the disputes will loom large over the October 22-23 meeting of ministers and central bank chiefs in the southeastern city of Gyeongju.

Ministers will set the agenda for the November 11-12 Group of 20 summit in Seoul, South Korea’s biggest international event for two decades.

AFP – This file photo taken on May 26, 2010 shows an Australian 100 dollar note (C) amidst a raft of foreign currencies.

Seoul wants to leave its mark on history with a “Korea Initiative” to set up a global financial safety net aimed at protecting emerging markets from disruptions caused by sudden changes in capital flows.

The nation, which built its economic “Miracle on the Han River” on the ashes of the Korean War, also intends to put development prominently on the G20 summit agenda for the first time.

And it wants to push ahead with reforms to the International Monetary Fund (IMF) to give emerging countries greater voting power, while encouraging the adoption of post-crisis rules to bolster the world’s banks.

“South Korea… will stress that a currency war is tantamount to mutual economic destruction and push for a compromise,” an organiser told Yonhap news agency on condition of anonymity.

The United States and European Union, trying to export their way to economic health amid lacklustre domestic demand, accuse China of significantly undervaluing the yuan to boost its own exports.

China says it is being made a scapegoat for US domestic problems.

And it points out that expectations of US “quantitative easing”, a move to pump more dollars into the market, are swamping emerging markets with destabilising capital inflows as investors chase higher yields.

The United States last Friday signalled a temporary truce, delaying publication until after the Seoul summit of a report that could have labelled China a currency “manipulator”.

There is a chance that “some sort of understanding” may be reached in Gyeongju, the Seoul official said, after weekend talks overseen by the United Nations raised the need for deeper global governance to tackle common problems.

Yoon Deok-Ryong, of the Korea Institute for International Economic Policy, said it would be hard to reach a firm agreement on forex issues at the South Korea meetings.

“However, an understanding may be reached by countries to abstain from measures that can worsen the situation until the next G20 summit planned for 2011 in France,” Yoon said.

The stakes are high, according to IMF chief Dominique Strauss-Kahn.

“The spirit of cooperation must be maintained. Without that, the recovery is in peril,” he told a meeting in Shanghai Monday.

South Korea says the G20 pulled the world back from a 1930s-style Great Depression but must now show it can cooperate in a post-crisis era.

Indian Prime Minister Manmohan Singh, in comments to Wednesday’s Financial Times, expressed fears about the group’s fraying cohesion — a concern echoed by Bank of England governor Mervyn King.

King called Tuesday for a “grand bargain” among the world’s major economies, saying forex tensions could spark trade protectionism.

“That could, as it did in the 1930s, lead to a disastrous collapse in activity around the world,” he said in a speech.

Ministers will discuss the state of the world economy, IMF reform and establishment of a financial safety net, the G20 framework for “strong, sustainable and balanced growth”, and regulatory reform among other issues.

The Basel Committee on Banking Supervision met Tuesday in Seoul to finalise reforms requiring global banks to bolster their reserves.

“The capital requirement, combined with a global liquidity framework, will substantially reduce the possibility of a banking crisis in the future,” said its chairman Nout Willink.

The Financial Stability Board created by the G20 was meeting in Seoul Wednesday. It was expected to agree a broad plan to strengthen regulation and supervision of banks and other financial companies seen as “too big to fail”.

Source: SGGP

Japan warns of more currency intervention

In Uncategorized on October 15, 2010 at 10:26 am

AFP/File – A bank teller counts yen bank notes in Tokyo.

HONG KONG (AFP) – Fears of a global currency war mounted Friday after Japan voiced concerns about wild forex movements, while China said the US should not use the yuan as a “scapegoat” for its economic woes.

The comments come as tensions simmer between nations as they to damp their currencies to safeguard exports, an issue that is set to dominate a Group of 20 summit of the world’s top economies next month.

Japan’s Prime Minister Naoto Kan said Friday he was “very concerned about the currency situation” after the yen hit a 15-year high against the dollar on expectations the US will soon announce economic pump-priming measures.

Earlier his finance minister, Yoshihiko Noda told reporters: “We will take decisive steps when necessary, from the perspective of curbing excessive fluctuations in exchange rates.”

Tokyo’s warnings come as Japan’s shaky economic recovery is held up by the soaring yen, which hurts the nation’s growth-driving exporters by making their products more expensive overseas.

The US Federal Reserve’s expected easing measures are aimed at boosting the world’s biggest economy, which many in Washington say is being hampered by an undervalued Chinese yuan.

However, Beijing Friday said the yuan’s weakness against the greenback must not be used as a “scapegoat” for Washington’s problems.

“The United States can’t use domestic reasons to pass on its domestic employment and economic growth problems (to other nations),” commerce ministry spokesman Yao Jian told reporters.

“The yuan’s rate must not be the scapegoat of US domestic problems.”

Yao’s statement came hours before a US Treasury Department’s report on nations’ currency practices that could label Beijing a “currency manipulator”.

Yao said US impatience with the yuan was part of an American strategy aimed at taking “discriminatory trade measures against Chinese products.”

Critics in the United States and Europe accuse China of keeping the yuan undervalued by as much as 40 percent but Beijing has consistently rejected any pressure for a fast rise in the unit.

The yuan has gained just over 2.6 percent since Beijing said in June it would allow it to move more freely against the greenback.

The dollar’s weakness was compounded after data Thursday showed the trade deficit jumped to 46.3 billion dollars in August while new claims for unemployment benefits rose, adding to fears about the economy.

A surprise policy tightening move by Singapore to widen the trading band of its currency on Thursday also added to pressure on the greenback.

On Friday the dollar stood at 81.31 yen, from 81.44 in New York Thursday, where it plunged to a 15-year low of 80.89 yen at one point.

The euro stood at 1.4048 dollars and 114.35 yen, compared with 1.4083 dollars and 114.70 yen in New York.

The Australian dollar was almost at parity with the greenback, striking 99.94 US cents at one point before easing to 99.25, while the Singapore dollar was at 1.263 against the US dollar.

Fears have escalated as emerging economies look to combat inflows from investors searching for higher yields, which have pushed regional units up.

The dollar’s tumble has led to fresh fears of a global currency war as nations look to safeguard exports, with governments trading blows.

Tokyo Wednesday criticised China and South Korea for their policies, calling on them to refrain from pushing their currencies lower and act “responsibly” to help stabilise markets.

Japan stepped into the forex markets in September for the first time in six years, although Tokyo says it acted to prevent volatile movements.

But it has accused Seoul of repeated interventions to sell the won and put its own exporters at an advantage while suggesting Beijing has made slow progress with yuan reform.

Thailand moved Tuesday to rein in the soaring baht, which is at near 13-year highs.

The forex disputes will be top of the agenda at the G20 summit in Seoul next month, South Korean Finance Minister Yoon Jeung-Hyun said Friday.

However, the battle is likely to come to the fore when Group of 20 finance ministers hold a pre-summit meeting on October 22-23.

Against other Asian currencies, the dollar was at 1,112.00 South Korean won, from 1,111.55 Thursday, at 30.70 Taiwan dollars from 30.69, at 43.27 Philippine pesos from 43.19 and 8,923.00 Indonesian rupiah from 8,917.50.

The Thai baht changed hands at 29.82-87 against the dollar, flat from 29.82-85.

Source: SGGP

‘No risk’ of currency war: Geithner

In Uncategorized on October 13, 2010 at 8:10 am

There is “no risk” of a global currency war erupting, despite recent currency interventions by nations ranging from Japan to Colombia, US Treasury Secretary Timothy Geithner has said.

Geithner acknowledged in an interview on “The Charlie Rose Show” broadcast on Bloomberg TV that Brazil has made reference to the possibility, but he brushed aside fears.

“They used that phrase,” Geithner said. However “there is no risk of that.” Geithner’s comments came despite a failure this weekend by the world’s top finance officials meeting in Washington to reach a consensus on measures that could head off a potential currency battle.

A Chinese bank worker counts US dollar notes alongside stacks of 100-yuan notes in central China’s Anhui province

In a statement, the International Monetary and Financial Committee — the policy arm of the IMF — on Saturday stopped short of any specific call on China or others to change policies of using a low currency and accumulation of reserves to boost exports.

The International Monetary Fund steering committee, which has been struggling to address friction among key economies including China and the United States, noted “tensions and vulnerabilities” due to “widening global imbalances” but said the organization should continue to study the situation

Geithner on Saturday said the IMF “must strengthen its surveillance of exchange rate policies and reserve accumulation practices,” adding that “excess reserve accumulation on a global scale is leading to serious distortions in the international monetary and financial system.”

Recent IMF figures showed Beijing had currency reserves of 2.447 trillion dollars, the largest in the world and nearly 30 percent of the global total.

Washington maintains that China purchases large amounts of dollars to keep the yuan artificially low, which distorts global trade by boosting Chinese exports.

Source: SGGP

Euro is a ‘credible, solid’ currency: Lagarde

In Uncategorized on June 26, 2010 at 12:41 pm

LONDON, June 26, 2010 (AFP) – French Finance Minister Christine Lagarde called the euro “a credible, solid” currency and expressed confidence that troubled eurozone member Greece will be able to cut its public debt.

(AFP file) French Finance Minister Christine Lagarde

Asked in an interview with the BBC whether the European currency faced a threat to its continued existence, Lagarde said: “I know that that’s some sort of an existential dream of some economists.

“They’re very pleased to drive those sorts of dark scenarios and my position is I don’t want to drive those dark scenarios.

“What I’m focused on is what is going to work so that the eurozone stays together, supports the euro together, because the euro is a credible, solid and good currency for all of us and it’s our public good,” she added.

She dismissed as “just a lot of rubbish” speculation about Greece’s ability to repay its debts within the next 18 months.

“The plan that we’ve put together for Greece is a five-year plan, with a three-year grace period when they pay back nothing and then there are 24 monthly instalments over the next two years,” Lagarde said

“So let’s not mess around with 18 months,” she said, adding that Greece was “currently delivering against its commitments”.

Greece has adopted austerity cuts to secure a 110-billion-euro (135-billion-dollar) bailout loan from the European Union and the International Monetary Fund and save itself from default.

It is struggling to reduce a debt of nearly 300 billion euros while mired in a deepening recession.

Lagarde also said there was “no difference, no crack” between France and Germany over how to deal with the financial crisis.

“We’re both driven by the two-fold objective to maintain growth and of cutting deficit and debts, and this is our joint commitment,” she said.

Asked whether Germany was doing enough in the crisis, she said, “Germany is doing everything it can at the moment.

“We can all do more and some can do more in cutting deficits and debts, some can do a little bit more in spending and consuming,” she added.

Europe has come under increasing pressure from the United States to focus on measures to stimulate and protect economic growth, rather than to rein in spending programmes put in place to combat the worst recession in decades.

But German Chancellor Angela Merkel, head of Europe’s largest economy, has led moves to slash spending after the eurozone debt crisis forced Berlin to stump up the lion’s share of cash for an unprecedented rescue mechanism.

Critics have said that the more than 80 billion euros (98 billion dollars) in savings announced by Merkel over the next four years, which mirror similar efforts in other European countries such as Britain, will hit growth.

Source: SGGP

Asian stocks up after China currency announcement

In Uncategorized on June 21, 2010 at 12:29 pm

Asian stock markets rose early Monday after China ended its two-year peg to the dollar over the weekend, though there was no immediate change in the yuan’s exchange rate.

Japan’s benchmark Nikkei 225 stock index gained 146.33 points, or 1.5 percent, to 10,141.35.

South Korea’s Kospi rose 1.5 percent to 1,737.12, and Australia’s S&P/ASX 200 was up 1.4 percent at 4,616.20.

China’s main share benchmark, the Shanghai Composite Index, added 0.8 percent to 2,534.08, while Hong Kong’s Hang Seng index climbed 2.1 percent to 20,702.33.

The Hang Seng was led by heavyweights such as China Life Insurance, which advanced 2.7 percent and Bank of China, up 2.3 percent.

In this Nov. 17, 2009, file photo, a bank clerk stacks up renminbi banknotes at a bank in Hefei in central China’s Anhui province

The official exchange rate for China’s currency stood unchanged Monday morning in line with the central bank’s warning the value of the yuan would not dramatically rise after its two-year peg to the dollar ended.

The People’s Bank of China left the yuan’s parity rate against the U.S. dollar unchanged Monday at 6.8275, the official Xinhua News Agency said. The rate is a weighted average of prices given by market makers, excluding highest and lowest offers.

“The Chinese side announcing the possibility of greater flexibility for the renminbi, which raises hopes for reminbi appreciation and gives more impetus to Hong Kong stocks,” said Ben Kwong Man Bun, chief operating officer at KGI Securities in Hong Kong, using the other Chinese term for its currency.

The impact of any change in the yuan’s value will be mixed, he noted, with exporters likely to suffer and importers and airlines, whose debts are denominated in U.S. dollars, gaining.

The yuan’s value has been pegged to the U.S. dollar for two years, causing friction with countries who say it is undervalued for China’s own benefit. A stronger yuan would make Chinese exports more expensive and bring relief to foreign manufacturers that have struggled to compete.

Beijing has long refused to allow the yuan to float and denied accusations it is unfairly undervalued.

The central bank said it would rely more on a basket of currencies that includes the U.S. dollar to determine the exchange rate, rather than the dollar alone.

In currencies, the dollar rose to 90.47 yen in Tokyo on Monday morning from 90.36 yen in New York late Friday. The euro stood at $1.2432, little changed from $1.2435.

Source: SGGP