Archives of “June 1, 2021” day

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PBOC sets USD/ CNY central rate at 6.3572 (vs. yesterday at 6.3682)

  
  Analysis

The People’s Bank of China set the onshore yuan (CNY) reference rate for the trading session ahead.

    • USD/CNY is permitted to trade plus or minus 2% from this daily reference rate.
    • CNH is the offshore yuan. USD/CNH has no restrictions on its trading range.

 

  • The previous close was 6.3710
  • Reuters estimate from their survey was 6.3556, Bloomberg 6.3556 …. (A rate that’s significantly stronger or weaker than expected is typically considered a signal from the PBOC).

PBOC setting the mid-rate slightly weaker than expected (for the CNY) today but nevertheless at the highest (for the CNY) since May 15 of 2018.

 

PBOC injects 10 billion yuan liquidity via 7-day reverse repo

  • 10bn mature today
  • thus a net neutral day

South Korea exports continue their rocketing surge (May data +49% y/y)

  
  Analysis

South Korea May 2021 data:

 

  • exports +45.6% vs yr earlier (Reuters poll +48.5%)
  • imports +37.9% vs yr earlier (Reuters poll +40.5%)
  • trade balance at provisional $+2.93 bln vs $+0.434 bln in April
  • exports to China +22.7% y/y
  • semiconductor exports +24.5% y/y
  • avg exports per working day +49.0% y/y

 

Exports growth sharpest in 32 yrs

Each time I post y/y data I have to mention the impact of comparison to 2020, the midst of the pandemic and response, i.e. there is a ‘base effect’.

Banks shouldn’t cite April 2018 circular for denying crypto services: RBI

  
Analysis, BITCOIN

The Reserve Bank of India (RBI) on Monday clarified that banks can no longer cite its circular on cryptocurrencies for not offering such products to customers, but said the lenders must adhere to local rules, which are quite exclusionary.

The central bank, in its circular dated April 6, 2018, had prohibited banks from dealing in cryptocurrencies or offering any service to customers on them.

The circular was challenged in the Supreme Court, which set aside the rules on 4 March, 2020.

However, the RBI said, banks continue to cite the 2018 circular by the RBI in order to justify why they are not offering any services on cryptocurrencies.

“In view of the order of the Hon’ble Supreme Court, the circular is no longer valid from the date of the Supreme Court judgement, and therefore cannot be cited or quoted from,” the RBI said in a clarification on its website.

However, the central bank also cautioned banks that they must still continue to carry out customer due diligence processes “in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.” (more…)

A coronavirus ICYMI – China first lockdown since January – Guangdong / Guangzhou partial lockdown

  
Analysis, COVID-19

Guangzhou is a city in the southern Chinese province of Guangdong

  • a partial lockdown has been imposed on Guangzhou
  • travel restrictions apply in Guangdong
  • mass testing is under way
  • lockdown in place in the worst-hit district of Guangzhou
  • residents of some otGuangzhou districts have been told to get tested and large-scale screening is also under way in Foshan and Shenzhen
  • Guangzhou officials have focused its Covid-19 vaccination programme on priority groups
Guangzhou is a city in the southern Chinese province of Guangdong 
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