China is wrong venue for an SDR revival

September 1, 2016

Beijing wants to revive interest in Special Drawing Rights, the IMF quasi-currency it is about to join. The World Bank will sell $2 bln of SDR debt in China to help. Global investors badly need an alternative to the dollar but China's rickety bond market is a poor place to start.

Review: Blockchain hopes go well beyond finance

June 10, 2016

The distributed-ledger concept is linked to the bitcoin cryptocurrency, and more recently potential financial uses have taken wing. A new book, “Blockchain Revolution,” explores democratic and humanitarian applications. It’s both eye-opening and, at times, a bit wide-eyed.

Who cares who invented bitcoin?

May 2, 2016

The whole point of the cryptocurrency and related technology is that they now live a life of their own. That makes Australian Craig Wright’s claim to be bitcoin creator Satoshi Nakamoto a curiosity at best. There is, however, a caveat related to the originator’s personal stash.

An unstable yuan is part of China’s new normal

January 11, 2016

Surprise moves in the currency have left global investors guessing about foreign exchange policy in the People’s Republic. Doubts about the central bank’s ability to manage the exchange rate add to the uncertainty. After years of tight control, instability looks here to stay.

China market confusion has investors fearing worst

January 7, 2016

The tumbling yuan may be a sign the People’s Republic sees currency devaluation as a solution to its economic woes. Or maybe planners are struggling to adapt to more liberal markets. Suspended stocks heighten the sense of chaos. For the rest of the world, the signs are ominous.

Dollar peg remains Saudi Arabia’s best option

November 27, 2015

Saudi Arabia is under pressure to break its currency peg with the dollar. The inflexible riyal means Saudi can’t devalue to offset weak oil prices. But given Riyadh’s huge forex reserves, the risks of moving to a floating currency still outweigh the rewards.

Offshore yuan is poster boy turned problem child

September 21, 2015

The untamed version of the Chinese currency has gone from a beacon of convertibility to a magnet for capital outflows. Beijing has a bad choice: Choke yuan liquidity in Hong Kong to kill speculation and China’s global dreams may suffer; or stoke it and be forced to devalue again.

Asian capital controls are a real risk once again

August 21, 2015

Malaysia’s prime minister has ruled out a repeat of the country’s 1998 hot money curbs. But slumping Asian currencies suggest it’s too soon to be complacent. Raising interest rates could mean deep recessions. Some politicians might decide to prevent capital from leaving instead.

China’s currency could fall another 5 percent

August 13, 2015

The central bank says it’s not out to weaken the yuan. But to recoup China’s competitiveness without slipping into deflation, a slide to at least 6.75 to the dollar would be welcome. That could help the mainland, but would give the rest of the world a new headache.

China’s yuan devaluation push looks far from done

August 12, 2015

The central bank weakened the official exchange rate by another 1.6 pct against the U.S. dollar. It’s a clear sign the new “market-oriented” yuan is heading down. Until China uses its foreign exchange hoard to prop up the currency, investors will assume there’s further to go.