Germany to add China’s yuan to currency reserves

The yuan has gained increasing global clout in recent years and in September 2016 it joined the dollar, pound, yen and euro in the IMF’s elite “special drawing rights” reserve currency basket. (AFP)
Updated 16 January 2018
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Germany to add China’s yuan to currency reserves

BEIJING: Germany’s central bank has said it will include China’s yuan in its reserves, giving another boost to Beijing’s drive to internationalize the currency and helping send the unit to two year highs.
The Bundesbank said its board had decided in July to invest in the renminbi, as it is also known, to take account of its growing importance globally, though it did not say when it would begin to include it or how much it would purchase.
“The decision to accept the renminbi is part of a long-term diversification strategy and reflects the growing role of the Chinese currency in the world financial system,” Bundesbank board member Joachim Wuermeling said on Monday.
The German central bank regularly reviews the composition of its currency reserves “by weighing risks and benefits,” Wuermeling said.
“In addition to dollars and yen, (the bank) has invested in Australian dollars since 2013 and seeks to invest in other currencies.”
The move comes after the European Central Bank in June converted €500 million (SR2.275 billion) worth of its dollar reserves into yuan.
China was Germany’s top trade partner in 2016, ranking first in the European country’s imports and fourth as an export destination.
The Bundesbank’s currency reserves totaled some €170 billion in November.
The yuan has gained increasing global clout in recent years and in September 2016 it joined the dollar, pound, yen and euro in the IMF’s elite “special drawing rights” reserve currency basket.
It strengthened to 6.4138 against the dollar on Monday, its highest level since December 2015, according to China’s Foreign Exchange Trade System, but weakened slightly to 6.4319 on Tuesday.
The unit has rallied from lows close to 7.0 against the greenback seen at the turn of the year, with the dollar also coming under pressure from most other currencies.
China’s central bank only allows the tightly controlled yuan to rise or fall two percent on either side of a daily reference rate to prevent volatility but it takes into account market pressures when making its decision.
But the latest rise could lead officials to intervene, analysts say, to prevent the currency becoming too expensive.
Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered in Hong Kong, said: “Policy reactions may include outright interventions right before close, or a relaxation of outflow control measures to release the yuan appreciation pressure.
“The government will likely gradually expand the range each year, paving the way for a lightly managed float in two to three years.”
The yuan’s weakness against the dollar has been a sensitive issue with the US, with President Donald Trump in the past hitting out at what he calls unfair trade practices by China aimed at giving their exporters an advantage over US firms.


UAE to loosen visa rules for investors and innovators

Updated 21 May 2018
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UAE to loosen visa rules for investors and innovators

  • UAE cabinet announces the launch of an integrated visa system to attract talent and talent in all vital sectors of the national economy
  • The Council also announced changes in the system of foreign ownership of companies in the country, which allows the acquisition of 100% of the global investors by the end of the year

DUBAI: The United Arab Emirates, home to financial hubs Abu Dhabi and Dubai, is loosening its residency laws and will grant long-term visas for up to 10 years to investors and highly-skilled professionals.
The 10-year residency visas will be granted to specialists in science, medicine and research, and to “exceptional students.” The state-run WAM news agency says the plan aims to attract global investment and innovators.
The UAE Cabinet approved the new rules on Sunday, saying plans are also on track to allow foreign investors 100 percent ownership of their UAE-based companies this year.
His Highness Sheikh Mohammed bin Rashid Al Maktoum affirmed that the UAE will remain a global incubator for exceptional talents and a permanent destination for international investors. “The UAE has been open, governed by tolerance and contributed to by all who live on its land.
“Our open environment, tolerant values, infrastructure and flexible legislation offer the best opportunities to attract international investment and exceptional talent in the UAE,” he said. “Our country is the land of opportunity, the best environment for realizing human dreams and unleashing their extraordinary potentials.”
The new regulations include raising the percentage of global investors’ ownership in companies to 100% by the end of the current year. He directed the Ministry of Economy in coordination with the concerned parties to implement the decision and follow up on its developments and submit a detailed study in the third quarter of this year.
The new regulations approved by the Council of Ministers and the authorities concerned have also set the procedures for implementing them to grant investors residence visas of up to ten years for them and all members of their families, as well as granting residency visas of up to ten years for specialized competencies in the medical, scientific, research and technical fields.
The new regulations also include visas for students studying in the country for five years and a 10-year residency for exceptional students.
Under current laws, foreign companies must have an Emirati owning 51 percent of the shares, unless the company operates in a free zone. Major brands Apple and Tesla are believed to be exceptions to the rule.