China rules out competitive currency devaluations

An office building is reflected on a new 100 Yuan note on display outside a bank in Beijing, in this Jan. 11, 2016 file photo. (AP)
Updated 07 May 2017
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China rules out competitive currency devaluations

BEIJING: China has no intention and no need to carry out competitive currency devaluations, the head of the country’s foreign exchange regulator said.
In a weekend piece in the Chinese magazine Modern Bankers, Pan Gongsheng said the People’s Bank of China’s (PBoC) supplying of liquidity to the market was to prevent excessive fluctuations in the exchange rate and prevent a “herd effect,” to maintain market stability.
“China has no intention of raising competitiveness via currency devaluation. It does not have this wish, and it also does not have this need,” Pan, who runs China’s State Administration of Foreign Exchange (SAFE), wrote.
China was working hard to raise the exchange rate’s flexibility and to maintain its stability, he added.
This was good for the international community and would avoid negative spillover effects from a disorderly exchange rate adjustment or competitive devaluations by other currencies, Pan wrote.
Pan is also a vice governor of the PBoC.
China’s yuan is up just around 0.6 percent so far this year, having lost nearly 7 percent in 2016. In November, the yuan hit an eight-year low following Donald Trump’s shock election as US president.
In a Reuters poll last week, the yuan was forecast to weaken to 7.07 per dollar in a year.
Despite harsh rhetoric about China on the campaign trail, Trump has recently had warm words for his Chinese counterpart Xi Jinping, praising him for trying to rein in nuclear-armed North Korea.
Trump has also backtracked on his pledges as a candidate to label China a “currency manipulator” and impose steep tariffs on Chinese imports.
Speaking at a forum on Sunday organized by Hong Kong-based Phoenix Television, Chinese Vice Finance Minister Zhu Guangyao said that trade disputes between China and the US should be resolved via “cooperative methods.”
China and the US need to strengthen fiscal and monetary policy coordination, he added, according to a report on the broadcaster’s website.
China will also pay close attention to Trump’s tax cut plan, Zhu said, without elaborating.
Last month, Trump unveiled a one-page plan proposing deep US tax cuts that would make the federal deficit balloon if enacted.


Shareholders of India’s Jet Airways approve debt-for-equity swap

Updated 23 February 2019
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Shareholders of India’s Jet Airways approve debt-for-equity swap

  • The plan will mean the lenders will have a bigger holding than any other shareholder
  • Currently, Chairman Naresh Goyal owns a 51 percent stake in the company and Abu Dhabi’s Etihad Airways owns 24 percent

MUMBAI: India’s Jet Airways said late on Friday that its shareholders approved a plan to convert existing debt to equity, paving the way for the troubled company’s lenders to infuse funds and nominate directors to its board.
Jet’s board last week approved a plan by lenders, led by State Bank of India, for an equity infusion, debt restructuring and the sale or sale-and-lease-back of aircraft.
The plan will mean the lenders will have a bigger holding than any other shareholder.
Currently, Chairman Naresh Goyal owns a 51 percent stake in the company and Abu Dhabi’s Etihad Airways owns 24 percent.
Jet, which had net debt of 72.99 billion rupees ($1.03 billion) as of end-December, has debt payments looming next month, according to rating agency ICRA. It has been unable to pay pilots’ salaries and has outstanding bills to aircraft lessors.
The company, India’s biggest full-service carrier, is struggling with competition from budget rivals, high oil prices and a weaker rupee. The share price took a beating in 2018, losing nearly 70 percent of its value.
In a regulatory filing, Jet said on Friday that 98 percent of its shareholders voted to increase the share capital to 22 billion rupees ($309.8 million) from 2 billion rupees at a special meeting.
Jet, whose financial woes are set against the backdrop of wider aviation industry problems, has been in the red for four straight quarters.