Is it worth keeping money in RMB. Why is the yuan not a dollar? Free conversion, but bad rate
How the yuan exchange rate changes
If you want to save your funds, earn a little and protect yourself from exchange rate losses, it is better to keep funds in a currency basket in equal proportions (dollar, euro, ruble). Then you will receive income from the deposit for each currency and protect yourself from losses on exchange rate differences. Roman Markov, head of the trading and information department of SMP-Bank, recalls this.
“The yuan is a really interesting currency for an economically strong country, and it has several characteristics. One of them is that the yuan exchange rate does not primarily depend on market factors, ”explains Markov. The renminbi exchange rate does not add up depending on supply and demand at a certain moment, but is regulated by the local central bank. This means that, if necessary, the Chinese Central Bank will set the course that it needs. For an investor who holds assets in a given currency, these are risks that are difficult to assess.
Where to get Chinese money
- A few years ago, the yuan was rarely even included in the list of those exotic currencies that banks offered to the public. The pound sterling, Japanese yen and Swiss franc were much more popular. Now deposits in yuan for clients of different incomes in Moscow are offered by several banks, mainly focused on work in the eastern part of Russia. Now they are joined by the leaders of the consumer sector from the first lines of bank ratings. The yield on such deposits is 2-3% per annum.
For quite a long time, since its inception, the yuan was somehow pegged to the dollar. Until the 1970s, the exchange rate was 2.46 yuan to the dollar. By 1980, the exchange rate had risen to 1.5 yuan to the dollar. After that, the government of the country began to undervalue the rate in order to stimulate exports. Due to this, the era of rapid development of the Chinese economy began. By 1994, the exchange rate had reached its lowest level in history - 8.62 yuan per dollar. The United States and Europe then criticized China for unscrupulous ways to make their products competitive in world markets.
In the mid-2000s, China exhausted opportunities for rapid growth from exports and new labor, and the economy was reoriented to domestic demand. Then the country abandoned pegging the yuan to the dollar, pegging it to a basket containing the currencies of the United States, the eurozone, Japan, South Korea and, to a lesser extent, Russia, Great Britain, Thailand, Australia, Canada and Singapore. But in the 2008 crisis, the yuan was again pegged to the dollar at 6.83 yuan per dollar. By November 2014, the yuan rate strengthened to 6 yuan per dollar (however, the strengthening trend has stopped since mid-2014 - note "YK").
Yet China is more dependent on the welfare of the United States than any other country. The fact is that China is the largest creditor to the United States and has already overtaken Japan and Belgium in terms of the amount of purchased US Treasury bonds. V last years China is still trying to get away from this dependence by replenishing its gold reserves and diluting American bonds.
“As for the prospects for the growth of the yuan against the ruble - look at the curve of the rate of our currency relative to others,” advises Roman Markov. The ruble is declining against the dollar, the euro, and the yuan at a comparable pace. That is, to say that now, because of the exchange rate difference, keeping funds in yuan is more profitable than in dollars.
“In addition, an attempt by a non-professional to make money on exchange rate differences is associated with high risks the underestimation of which often leads to losses, ”warns Roman Markov.
Superpower money
The yuan is gaining more and more weight in the world economy, Natalya Smirnova said. In 2010, a whole block of countries pegged their currencies to the yuan - this is South Korea, Indonesia, Malaysia, Philippines, Taiwan, Singapore and Thailand. This happened in connection with the trade integration of China and others. developing countries East Asia.
A year ago, the yuan became the second most popular currency in world trade. He bypassed the euro: the share of the yuan in international settlements in 2013 was 8.66%, and the euro - 6.64%.
“So far, the yuan is not among the reserve currencies, but other countries are increasing the share of the yuan in their foreign exchange reserves. For example, the Australian Reserve Bank and the Swiss National Bank have announced this, ”says Smirnova.
Almost like a dollar
- The trading volume for the yuan / ruble pair on the Moscow Exchange in October 2014 reached its maximum recorded monthly value. It amounted to 12.5 billion yuan, or 83.5 billion rubles. According to the stock exchange, in comparison with September, the indicator increased by 80%.
- In early November, the yuan rate renewed its historical maximum on the Moscow Exchange and once reached almost 7.9 rubles. In June, the yuan could be bought for about 5.4 rubles. That is, since then, the Chinese currency has risen in price by about 30%, which is comparable to the rate of change in the exchange rates of the dollar and the euro.
Free conversion, but bad rate
“In relations with the ruble, the yuan is becoming a freer currency,” Smirnova said. Previously, the ruble-yuan conversion was carried out only through the dollar, and since the end of 2010, trading in the ruble-yuan pair began on the MICEX. Now the Moscow Exchange believes that the volume of yuan / ruble transactions in 2015 may already reach 1 billion yuan a day.
At the same time, not many banks give good course exchange of yuan for rubles. “Moreover, spreads (the difference between the best buy and sell price. - "Profile") the market for the exchange of one currency for another is quite wide when compared with the dollar or the euro, ”says Roman Markov from SMP Bank.
For the layman, inconveniences will appear, for example, when he wants to exchange currency in another country. If he took dollars or euros with him, they can most likely be exchanged for national currency anywhere. Difficulties may arise with the yuan: not every bank will exchange it, and where it can be done, there will be a wide spread.
Taking into account all the risks, the income on the deposit in yuan should be significantly higher than in the dollar and euro. “So, the advantage of deposits in yuan in relation to dollar or euro can only be in rates,” sums up Roman Markov.
From October 1, the Chinese yuan will officially enter the currency basket of the International Monetary Fund (IMF). Now it includes the US dollar, euro, Japanese yen, British pound sterling. /еpochtimes.ru/
Yuan is now considered " freely usable currency", Which can be settled with the IMF. V currency basket The IMF yuan came in third with a stake of 11%. At the same time, the dollar remained at the same level - about 40%, the share of the euro decreased from 37% to 31%. The yen will be 8% in the basket instead of 9%, the pound - 8% instead of 11%.
The euro lost the most from the inclusion of the yuan in the currency basket. "The value of the euro in international settlements is declining, since it is no longer so dominant in international trade," - explained the situation Rolf Langhammer.
Reducing the share of the euro in the currency basket will benefit her, Henning Voepel believes. Falling demand for the euro will lead to a depreciation of its exchange rate, which will strengthen the export of European goods.
Inclusion in the IMF basket is a matter of prestige
First of all, the inclusion of the yuan in the IMF basket is prestigious for China. “There was no dispute over the inclusion of the yuan in the currency basket, because very few people in the international community are concerned about this issue. To become a member of a small club is, of course, relatively prestigious, even if many have not heard of its existence, ”says Mark Williams. However, the inclusion of a currency in the IMF basket usually does not increase demand for it, he said.
“Despite being included in the currency basket, it is likely that the yuan will continue to depreciate, but more slowly. The Chinese authorities will try to make the yuan exchange rate decline gradually, ”said Diana Choyleva. If the yuan had not been included in the currency basket, its exchange rate could have fallen sharply, which would have affected the world economy.
Free conversion of RMB not earlier than 10-15 years
The inclusion of the yuan in the IMF basket will encourage the Chinese authorities to take further steps towards free currency conversion, noted Hennig Voepel. Now the yuan cannot be considered a freely convertible currency, since the Chinese authorities keep it in a tight currency corridor and restrict the movement of capital. They artificially undervalue the renminbi's exchange rate to stimulate exports.
In the future, China needs a floating exchange rate however, the transition to it can take from 10 to 15 years. However, the PRC authorities themselves are more optimistic - they intend to achieve free currency conversion by 2020. “To be a reserve currency, it is necessary for the country that owns it to invest it somewhere, that is, you must have huge investable assets. China doesn't have them. It does not have a fixed rate bond market ... It will take 10-15 years to develop, ”says Jim Rickards.
Since the market cannot set the value of the yuan, the government artificially pegs the yuan to the dollar. In this situation, the inclusion of the yuan in the basket will increase the dollar's weight in it, which contradicts the original idea of the IMF. President of the People's Republic of China Xi Jinping has once again announced that the course towards market reforms and liberalization of the financial sector will be maintained; foreign exchange markets China will negatively affect the stability of the Chinese economy and significantly increase the likelihood of a "hard landing", according to a review by Sberbank.
Experts are skeptical about the immediate prospects for the yuan. “When deciding to keep your reserves in a particular currency, you thereby seek to protect yourself from possible fluctuations in the exchange rates of others. monetary units... But you will not achieve this goal with such a currency as the yuan, because its rate is pegged to the currency basket, in which the dollar occupies the most important place, "said the former vice president of IfW.
China has yet to acquire the status of the world's main trading country. In the meantime, this is not the case, although there are prospects. The influence of the Celestial Empire is growing.
The main problem now is that there are restrictions on the transfer of money in China.
For example, if you want to take and send from China somewhere a million dollars, you simply will not be allowed to do so. So there is no complete freedom, - he notes.
Almas Chukin
According to him, the market reacted positively to the extension of Xi Jinping's term, because its current term is the last one. And if so, in two or three years there would be nervousness in society about who would be the next in charge of the country.
What to expect?
But the extension of Xi's term means some stability, which reassures investors. Economist Rustem Zhanseitov agrees with him.
- The possible extension of Xi Jinping's term and the strengthening of the yuan indicate that
both China and its partners are satisfied with the current economic course Celestial
It seems that the value and weight of the yuan will strengthen in the long term, Zhanseitov suggests.
Rustem Zhanseitov, source: Atameken Business Channel
Economist Magbat Spanov also expects further strengthening of the yuan. This means that in the short term it is possible to invest in this currency. And what will happen in the future depends on domestic policy China. However, now, in his opinion, the yuan is overvalued.
- Generally,
it would be more profitable for the Chinese economy if the yuan was devalued
This would give China an opportunity to further increase its exports. But for his policy, such a high rate is good, - he thinks.
Will the yuan affect the tenge?
Zhanseitov has a completely different opinion about investments in the yuan as an instrument of income. Yes, in the near future, the use of the yuan as a settlement currency in the world economy will grow, its influence in the world economy will increase. financial system, thanks to tools such as Union pay and others. but
investing in yuan is not profitable in the short term
It can turn out to be interesting only in the long term.
As for the dollar, according to the economist, it is possible that it will weaken, although the yuan has not yet exerted direct pressure on the dollar.
- What can we say about tenge, which is more dependent on the ruble and oil. And this is still difficult to change, - he concludes.
Investments in the yuan do not look very attractive, especially against the background of investments in the dollar
Photo: Zoooom / Depositphotos.com
Investing in Chinese currency is an interesting way to keep savings from the depreciation of the ruble. However, while there is practically nowhere to invest the yuan, nothing threatens the dollar monopoly in Russia.
De-dollarization of the whole country
After the visit of Chinese President Xi Jinping to Russia, the authorities again started talking about the need to get rid of the dollar monopoly. The countries agreed to increase the share of settlements in national currencies and stimulate the issuance of debt instruments. And banks that connect to Chinese or Russian payment systems, as well as use direct correspondent accounts and participate in cross-border transfers, are promised support.
So far, despite all the efforts of our financial authorities, American currency prevails in settlements between Chinese and Russian companies... According to various estimates, it accounts for about 75-80% in trade turnover two countries. According to Natalia Orlova, chief economist of Alfa-Bank, the problem is that a significant share (57%) of exports to China go to the oil and gas sector. Nevertheless, the expert notes, the importance of the yuan in trade is growing. Over five years (2013-2018), the share of the yuan in Russian exports increased from 1.7% to 4.5%, and in imports - from 2.2% to 19.3%. Largely due to the fact that the Chinese authorities themselves are interested in the expansion of their currency into international markets, the expert points out. The IMF granted Beijing's request and has included the yuan in its currency basket since 2016. In addition to the Chinese currency, it contains the dollar, euro, British pound and yen.
For Russia, the Chinese currency is rather exotic. Constant fluctuations in quotes, a limited supply of banks and high spreads on exchanges - all this makes the yuan an extremely unpopular instrument for savings. Unlike the dollar, which has the majority foreign currency deposits Russians. As of May 1, according to the Central Bank, every fifth deposit was opened in foreign currency.
“In order for the liquidity of the Chinese currency to increase in Russia, it will take several years of very tight work and serious capital injection,” says Anna Bodrova, an analyst at the Alpari Information and Analytical Center. The main thing, she said, is that liquidity appears on the market, and banks begin to massively offer deposits in yuan.
Perhaps it is really only a matter of time, because, as bankers say, the demand for instruments in the Chinese currency is constantly growing. The other day, Otkritie Bank, controlled by the Central Bank, announced that it would import cash yuan, exchanging it for rubles at the Bank of Harbin. This will allow the development of settlements in yuan on the inside. Russian market, according to the release of the lending institution. “We see a steady demand for cash yuan from Russian banks,” a representative of Otkrytie told Banki.ru.
Indirect investment
Low liquidity and the almost complete absence of the opportunity to invest yuan for individuals make their purchase an extremely risky undertaking, experts say. Only a few Russian banks are now offering to open a deposit in Chinese currency, and the rates on such deposits are inferior to those in dollars. For example, one of the banks is now offering to open a deposit in yuan at 0.8-1.7% per annum (depending on the term and amount), but at least 20 thousand yuan (over 180 thousand rubles) will be required. Some credit institutions offer special savings accounts, but their yield is also inferior to dollar deposits. For comparison: now you can invest dollars at 3.5% per annum (Banki.ru portal).
The offer for investors trading on Russian stock exchanges is even more limited. There are practically no instruments denominated in yuan, except for the currency swap and the yuan-ruble pair. Several are also traded on the Moscow Exchange. futures contracts to the yuan. Last year, RusHydro issued bonds in yuan, but the bond is intended for qualified investors and is used exclusively in repo transactions.
Three years ago, the Ministry of Finance prepared the placement of OFZs in Chinese currency. It was planned to issue securities for 6 billion yuan (about 1 billion dollars), they were to be traded on the Moscow Stock Exchange. Also, investors from mainland China and Hong Kong were to get access to the bonds. However, it was not possible to agree on the placement with the Chinese authorities.
Therefore, those who decide to invest in securities denominated in Chinese currency have two options. The first is to open an account with a foreign broker, and the second is to invest in them indirectly, buying, for example, shares of Chinese companies or funds investing in the Chinese economy. In particular, ETFs on the MSCI China index are traded on the Moscow Exchange. The fund's profitability since the beginning of the year was 4.3%. Some management companies also offer to invest in Chinese funds. To do this, you will have to invest in mutual funds, the settlements in which also take place in rubles.
“Chinese stock indices have lagged somewhat behind the growth rates of Russian stock indices in terms of growth rates, but both have shown significant growth in recent years,” says Alexander Osin, an analyst at Freedom Finance. Since June 2016, the MSCI China index has grown by 34%, the corresponding index of the Russian market - by more than 42%. Trade wars and corporate debt remain the main threats to the growth of the Chinese economy. According to the analyst of "BCS Premier" Sergey Suverov, these factors can lead to a loss of up to 1% Country GDP... “However, the current account surplus and possible foreign exchange intervention will not allow the Chinese currency to weaken significantly, ”he said.
With yuan under your pillow
Investments in the yuan by themselves do not look very attractive, even without taking into account the rates on deposits and the lack of tools for a private investor. Especially against the background of the dollar, the exchange rate of which has been changing against the ruble more noticeably in recent years. Since June 2014, the yuan exchange rate has grown by almost 70%, to 9.3 rubles. The dollar has risen in price a little more - by about 87%.
At the same time, according to Bloomberg data, the yuan fell 11.3% against the dollar during this time. To a large extent, this was facilitated by the course of the Chinese authorities to weaken their currency in order to support the economic growth in the country. “The controlled weakening of the yuan made it possible to minimize external influence, but it is obvious that the Chinese currency has moved in a completely different direction, in which it was expected, "says Anna Bodrova from Alpari. Indeed, even at the beginning of 2016, the yuan exchange rate on the stock exchange reached 13 rubles, and many believed that it would continue to grow. Now, according to the analyst, the market is more likely to bet on the weakening of the Chinese currency. “If the trade war between the United States and China continues, the yuan will be under pressure and may well move towards 8 rubles or even lower. If an agreement is reached between the parties, the yuan will get a chance to stabilize in the region of 10 rubles, ”Bodrova predicts.
Promsvyazbank is expecting a larger drop in the Chinese currency rate: to 6.8-7 rubles. Therefore, according to the chief analyst of the bank, Mikhail Poddubsky, private investors are unlikely to invest in the yuan now, especially since, due to low liquidity, conversion costs may turn out to be very high.
On the other hand, some experts do not rule out that the long-term prospects of the yuan are very good. According to Finam analyst Vadim Sysoev, the yuan will be supported by the policy of the country's government, which is trying to reorient the Chinese economy from export-oriented to import-oriented. “In addition, the government of the Celestial Empire is taking a number of measures aimed at simplifying the access procedure for non-residents to financial markets mainland China, which will also generate additional demand for Chinese currency, ”he recalls.
The IMF has included the yuan with a basket of reserve currencies, which will allow states to borrow from the fund in this currency. Can investing in the yuan be interesting for ordinary citizens?
Photo: Zhang Chunlei / Zuma / TASS
On Monday night, November 30, the International Monetary Fund (IMF) included the Chinese yuan in its basket of key international currencies. Now it is on a par with the dollar, euro, yen and British pound. Various states will be able to use the yuan for international settlements and the formation of reserves.
The IMF decision comes into force in October 2016. The yuan will become the third-largest currency in the basket (10.92%), having reduced the share of the euro the most (after including new currency its weight will drop to 30.93% from 37.4%. The dollar will keep the largest share in the basket - 41.73%.
“Probably, the yuan will be able to displace the pound in the future, taking the third place in international settlements. But until China has liberalized capital flows, this is a marginal instrument for investors. Someday such liberalization will take place, the course towards this has already been proclaimed, but China has been thinking for centuries, therefore, its decision-making intervals are very long, ”notes Oleg Vyugin, Chairman of the Board of Directors of MDM Bank.
At the end of summer central bank China started to reduce the national currency. Since then, the yuan has depreciated about 3% against the dollar. Nevertheless, over 10 years, the Chinese currency has appreciated against the dollar by more than 20%.
Should Russians Invest in Chinese Currency? According to economists and bankers interviewed by RBC, no. This currency is still exotic for the Russian market: there is little demand for it, and the difference in buying and selling rates can offset the potential profit, even if it does exist. In addition, the Chinese authorities may agree to another decline in the national currency rate to stimulate the economy. It is better to keep savings in dollars and rubles, most experts believe, and some advise to start buying euros. “The euro is at the bottom, and its rate is likely to start growing soon,” says Alexei Golubovich, senior managing director of the consulting company Arbat Capital.
Vladimir Tikhomirov, chief economist of FG BCS:“The yuan belongs to exotic currencies on the Russian market, the demand for it is small. In addition to the fact that there may be difficulties in finding banks or exchangers that will accept yuan, it may turn out that the difference in the buy / sell rates will be so significant that the possible return on investment can be completely leveled.
In addition, based on the trend last months, it can be seen that the Chinese economy is slowing down. If this trend continues, there is a strong chance that the yuan will weaken against other currencies. Therefore, it makes little sense to buy yuan for savings. For this, it is better to use the dollar and the ruble. It makes no sense to change to the euro, as it is weakening. It is also not worth getting out of rubles completely, since part of the savings will still be spent in Russia. It is better to keep savings in the ratio of 50% to 50%. You can win nothing on this, but also not lose. "
Evgeny Koshelev, Rosbank analyst:
“It is better not to buy an asset that does not have sufficient liquidity. The yuan is very difficult to trade on the Russian market, it is quite difficult to find it, and any attempt to convert the difference in exchange rates will not be very profitable. Savings in Chinese currency may be interesting in certain regions, for example, in Far East... Here he is more popular due to the developed trade relations with China. However, in a year or two, the yuan may weaken, as the Chinese authorities may resort to lowering its exchange rate to stimulate the economy. I would be very careful about buying the yuan. Rosbank's forecast assumes that the yuan will weaken by 5-7% in the first-second quarter of 2016.
For the formation of long-term savings, the euro is now interesting. The European currency is cheap and will remain under pressure due to the ECB's quantitative easing program. However, in the future, the improvement of the eurozone economy will create preconditions for the growth of the euro. At the same time, any savings with a period of up to one year should be concentrated in rubles, because our rates are higher and you can lose a lot on the difference in exchange rates when buying or selling currency. "
Oleg Vyugin, Chairman of the Board of Directors of MDM Bank:
“The inclusion of the yuan in the IMF basket means only that now it has become one of those currencies in which sovereign borrowers can borrow from the fund. But the savings of the population is a completely different story: if with the dollar you can go to any country in the world and calmly exchange it for local money, then the yuan is not such a universal currency. RMB deposit rates are higher than dollar deposits but the Chinese currency carries the risk of devaluation.
If a person needs dollars to travel abroad or buy something abroad, it is clear that there should be dollars in his basket. From the point of view of organizing savings, the proportion is 50 to 50 s national currency is swing protection exchange rates... If the money is not very large and there is nothing to do abroad, then you can limit yourself to rubles alone: the rates on deposits will be three times higher than on the dollar, and purchasing power the ruble can fall only in the event of a deep decline in oil prices. You cannot protect yourself from this risk by keeping your savings only in rubles. "
Vladimir Pantyushin, senior strategist at Sberbank CIB:“While it is too early to buy the yuan, it is not a very liquid currency. It will be possible to take a closer look at it in a year, when central banks begin to buy it. The dollar now quite satisfies the demand for savings. In the near future he will the best currency due to expected strengthening due to increased interest rate Fed. It is better to keep savings in dollars and rubles, everyone should choose the ratio based on their needs. "
Natalia Orlova, chief economist at Alfa-Bank:"Bye economic situation on China is not very clear, it is better not to buy yuan. I would be careful about investing in this currency. China in recent times gives a lot of cause for concern because the pace of growth of its economy is slowing down. It is necessary to understand whether the Chinese leadership will be able to ensure a controlled slowdown in the economy. This will become clear not earlier than in a year.
If we talk about the prospects for the dollar and the euro, then the American currency looks more preferable. Based on the situation in the world market, the dollar has an unrealized potential for strengthening. "
Alexey Golubovich, senior managing director of the consulting company Arbat Capital:“The yuan is a non-convertible currency that, despite being listed as reserve currencies, cannot be freely bought and sold in any country. In addition, the yuan is likely to depreciate in the coming years. For the yuan to become a currency in which to store savings, it is necessary that this is done not only by the Chinese population, but also by a significant part of the rest of the world. If the rates on deposits in yuan are at least 4 p.p. higher than the dollar, it would make sense. However, if you live in the Far East, where the yuan is a liquid currency due to the large volume of shuttle trading, yuan accounts may be a better alternative than ruble deposits.
How to store savings? I believe that the most promising currency for the next year will be the euro ”.
Yuan is in demand
In early November, VTB24 was the first of the largest Russian banks to launch the service of cash purchase and sale of yuan in its offices. On Tuesday, December 1, the bank reported that the volume of exchange transactions with Chinese currency reached 5 million yuan. Thus, the yuan entered the top five most popular currencies among VTB24 clients, losing ground to the dollar, euro, pound and Swiss franc, the bank said. The largest volume of transactions fell on offices in Vladivostok and Moscow (1 million yuan each).
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