China tightens control to restrain currency’s rise

Dec 9, 2021, 5:57 AM | Updated: 10:15 am

BEIJING (AP) — China’s central bank is trying to restrain the rise of the yuan after the currency hit a 2 1/2-year high against the dollar.

Commercial banks were ordered Thursday to increase the amount of their foreign currency deposits that are held as reserves for the second time this year. That reduces the amount available for trading, making it easier for Beijing to manage the exchange rate.

The People’s Bank of China is trying to make the yuan’s state-set exchange rate more flexible and market-oriented but has intervened over the past year to restrain its rise. Those controls are an irritant in relations with Washington, which complains that a weak yuan makes China’s exports improperly cheap and swells its multibillion-dollar trade surplus.

The yuan has gained a modest 2% against the dollar since mid-August, but that was enough to boost it to 6.3762 to the dollar this week, its highest level since May 2018. That makes one yuan worth about 15.7 cents.

Thursday’s order raised banks’ foreign currency reserves to 9% of deposits from 7%. It was increased to that level from 5% in May, the first change since 2007. Economists said then that it locked up about $20 billion in foreign currency.

The ruling Communist Party said in 2015 the yuan would be made a “freely tradable and freely usable currency” by last year. But it has kept controls in place due to concern about swings in the exchange rate and the flow of money into and out of the world’s second-largest economy.

A rising yuan threatens to make China’s exports more expensive abroad, hampering a manufacturing revival following last year’s slump. A stronger yuan would make imported oil, iron ore and other raw materials cheaper for Chinese manufacturers.

In 2017, the central bank tightened controls on trading to stop a fall in the yuan’s value after a change in the mechanism used to set the exchange rate triggered a flurry of selling.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

In this photo provided by Dax McDonald, an Amtrak passenger train lies on its side after derailing ...
Associated Press

3 killed, dozens hurt in Amtrak train crash in Missouri

MENDON, Mo. (AP) — An Amtrak passenger train traveling from Los Angeles to Chicago struck a dump truck Monday in a remote area of Missouri, killing three people and injuring dozens more as rail cars tumbled off the tracks and landed on their sides, officials said. Two of those killed were on the train and […]
20 hours ago
FILE - The drug misoprostol sits on a gynecological table at Casa Fusa, a health center in Buenos A...
Associated Press

Instagram and Facebook remove posts offering abortion pills

WASHINGTON (AP) — Facebook and Instagram have begun promptly removing posts that offer abortion pills to women who may not be able to access them following a Supreme Court decision that stripped away constitutional protections for the procedure. Such social media posts ostensibly aimed to help women living in states where preexisting laws banning abortion […]
20 hours ago
In this image from video released by the House Select Committee, John Eastman, a lawyer for former ...
Associated Press

Lawyer who advised Trump says federal agents seized phone

WASHINGTON (AP) — A conservative lawyer who aided former President Donald Trump’s efforts to undo the 2020 election results and who has been repeatedly referenced in House hearings on the Jan. 6, 2021 assault on the Capitol said in a court filing Monday that federal agents seized his cell phone last week. John Eastman said […]
20 hours ago
FILE - Police tape blocks the entrance to the Castro Muni Metro train station following a shooting ...
Associated Press

Attorney: Man involved in train killing shot in self-defense

SAN FRANCISCO (AP) — A man who shot and killed a passenger on a San Francisco subway commuter train will be charged with gun crimes but not homicide in what was “clearly” a case of self-defense after he was attacked with a knife, his attorney said Monday. Javon Green, 26, will face charges of having […]
20 hours ago
Associated Press

Mary Mara, TV actor for decades, dies in apparent drowning

CAPE VINCENT, N.Y. (AP) — Mary Mara, who appeared on television shows including “Ray Donovan,” “Dexter” and “ER” in an acting career that spanned more than 30 years, has died in what New York authorities said appeared to be a drowning accident. The New York State Police said Monday a woman identified as Mara, 61, […]
20 hours ago
A rickshaw puller carries his customers around Tokyo's Asakusa area famous for sightseeing, Wednesd...
Associated Press

As COVID fears ebb, Japan readies for tourists from abroad

TOKYO (AP) — The rickshaw men in Tokyo are adding English-speaking staff, a sure sign Japan is bracing for a return of tourists from abroad. Japan’s border controls to curb the spread of coronavirus infections began gradually loosening earlier this month. That’s great news for Yusuke Otomo, owner of Daikichi, a kimono rental shop in […]
20 hours ago

Sponsored Articles

...
CANVAS ANNUITY

Best retirement savings rates hit 4.30%

Maximize your retirement savings with guaranteed fixed rates up to 4.30%. Did you know there is a financial product that can give you great interest rates as you build your retirement savings and provide you with a paycheck for life once you retire? It might sound too good to be true but it is not; this product is called an annuity.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Update your child’s vaccines before kindergarten

So, your little one starts kindergarten soon. How exciting! You still have a few months before the school year starts, so now’s the time to make sure students-to-be have the vaccines needed to stay safe as they head into a new chapter of life.
...
Arizona Division of Problem Gambling

Arizona Division of Problem Gambling provides exclusion solution for young sports bettors

Sports betting in Arizona opened a new world to young adults, one where putting down money on games was as easy as sending a text message.
China tightens control to restrain currency’s rise