Chinese currency

An international payment specialist Travelex Global Business Payments unveiled a new service to allow its customers to trade in Chinese renminbi via its unique GEO Global Clearing Network. It will be the first non-bank institution to offer yuan transactions.

Now Travelex customers will be able to trade with high profile Chinese companies using the yuan currency to evade foreign exchange risks. For many businesses, the ability to price, settle and invoice in renminbi will encourage a faster, cheaper and more transparent supply chain.

As it became known Monday, Euroclear Bank is to allow clients to settle transactions and deposit Eurobonds and Hong Kong domestic securities denominated in the Chinese Yuan Renminbi in Euroclear Bank.

The very first transactions in Renminbi are due to be settled on 27 September.

Dominique Strauss-Kahn, the head of the International Monetary Fund said this week that he would like to consider the inclusion of Chinese yuan or renminbi into the basket of currencies that make up the Fund’s Special Drawing Rights “the sooner the better”. Still, he said that the yuan’s value first needs to be freely determined by the market.

Dominique Strauss-Kahn told reporters in a news briefing that he believed there would be more pressure to include yuan among SDR currencies as China's economic clout grows.

On Sunday China’s Commerce Minister Chen Deming made a statement that the Celestial Empire will immediately respond if the United States declares the country a currency manipulator and imposes trade sanctions. Washington was accused of politicizing the issue ahead of an April 15 deadline for the U.S. Treasury to rule whether China is unfairly holding down its exchange rate to gain a competitive edge in global markets.

According to the 21st Century Business Herald China is testing the country's labor-intensive export sectors to see how much yuan appreciation firms can withstand. The Ministry of Commerce and the Ministry of Industry and Information Technology are conjointly performing “stress tests” to use the results as a reference for the government's future yuan policy.

Goldman Sachs' chief economist Jim O'Neill was quoted as saying that China might take measures to let the yuan appreciated by about 5% so as to slow down its fast growing economy.

"I have a strong opinion that they're close to moving the exchange rate," Jim O'Neill told Bloomberg. "Something's brewing. It could happen anytime."

"They need to do something to slow the economy down and deal with the inflation consequences," he was quoted as saying. O'Neill believes China's economy is growing between 12% and 14%.

 The research institute of China's Ministry of Commerce published an essay that touched upon the issue of yuan appreciation and its adverse effects on the global economy. The essay notes that increasing the value of the Chinese currency would hurt rather than help world economic recovery.