People’s Bank of China Adviser: ‘Get More Gold BeiJing!’
- The world is returning to the gold standard. Central banks like Russia and China are preparing for it. The coming global currency crisis will reveal what fiat currencies are: a CONfidence Job!
Get more gold, Beijing told
China should enlarge its reserves of gold, platinum and other precious metals, a move that would also speed up the internationalization of the yuan, according to People’s Bank of China adviser Xia Bin. Mainlanders should also be allowed to make more foreign investments, Xia added. Central bank deputy governor Hu Xiaolian agreed, adding that the PBoC has to maintain healthy credit growth by striking a balance among local governments. Xia said relevant departments must maintain the “buy-at-a-low” strategy to boost gold reserves.
“Increasing gold reserves can increase the amount of solvency, which is critical for the internationalization of the yuan,” said Xia, noting that “the United States did not sell a single gram of gold, despite financial hardship in 2008.”
Meanwhile, mainland banks will be able to engage in currency swaps for corporate clients from March 1, allowing them to hedge foreign exchange risks as trade and use of the yuan expand. This is another move to boost the yuan’s global status. The currency swap is a pact by which two parties exchange specific amounts of yuan and another currency, and a series of interest payments on the cash flows, said the State Administration of Foreign Exchange. The new currency-swap rules can simplify the approval process by giving banks more flexibility, SAFE said.
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