What do you all think of the future prospect of the Chinese yuan (RMB)?

[hungryfriend]

it used to be sgd1 = rmb5+, currently is abt 4.8
with the chinese yuan being undervalued (as claimed by the US), and also the chinese govt determined to slowly and steadily increase it's value (maybe abt 1-5% a year), what do you guys think about its future prospect? is it worthwhile to start stocking some RMB in FD?

10-50 years down the road, provided the chinese govt is stable, the rmb is cfm going to raise and we could invest some now

maybe im slow and only thought of it now but just being careful, any opinions?

 

[chopra]

should be quite a low risk to assume it will appreciate...

 

[FP_IFA]

Low risk against most currencies but S$ isn't one of them. We have one of the strongest currency in the world.

 

[cookie_philosopher]

For some reason I just don't trust the chinese govt. Unless you are a chinese citizen, they can play out foreigners by changing their currency system entirely and only allow for one-to-one exchange to its people.

This is just a wild fancy theory but anything can happen and the Chinese are (unfortunately) just not some of the most trustworthy I feel. Can be seen with 5000 years of history.

 

[civicguy]

There is a new coursea course just starting next week on Chinese yuan

 

[dennismados]

Yuan appreciate not because it stronger but because other currency drop faster.

 

[Shiny Things]

Honestly you've probably missed most of the appreciation.

I'm not as in-the-loop with this stuff as I used to be, but the problem China faces is that it has a choice:
1) Slow the economy's growth, and rebalance toward consumer spending instead of investment spending; or,
2) Turn the credit taps on again, spend more on infrastructure and investment, and face another credit bubble.

Option 2 involves turning on the credit taps, which will be CNY-negative. I'm not sure what option 1 would mean for the CNY, but I think it's going to involve relatively slower growth, lower interest rates, and therefore a lower CNY.

So, yeah, short answer, I don't think CNY's a good long-term buy. (I'm generally opposed to retail FX punting anyway - especially doing it via fixed deposits, where you get charged 1% on the way in, 1% on the way out, and you have to accept below-market interest rates in the meantime. The banks love customers who do that stuff.)

 

[nokiatech]

So, yeah, short answer, I don't think CNY's a good long-term buy. (I'm generally opposed to retail FX punting anyway - especially doing it via fixed deposits, where you get charged 1% on the way in, 1% on the way out, and you have to accept below-market interest rates in the meantime. The banks love customers who do that stuff.)

Not sure why there are so much negative sentiments about investing in the CNY .... I suggest for a start, stop reading western news sources only. Be balanced , get the source from China & on the ground too .

Let's recap some Facts :

1) Most Western Banks + Governments are effectively bankrupt .
Trillion dollar deficits. Record debt levels. Bank account confiscation. Pension nationalization. Printing, printing, and more printing of money.
If the rating agencies S&P , Moody's were to rate the govt the same way they rate other entities , most Western Govt + Banks will be junk bond status.



2) Conversely , the China Government & Banks have the largest foreign reserves + gold in the world . China banks have ample liquidity reserves .

3) China banks currently pay saving interest rates of 3 to 4% pa.

4) Here's a question :guess what is the CNY relative appreciation against the USD$ since 2005 ?
5% , 7% or 10% ?

Come on guess.....
.
See Below
.
.
.
.


By 2012 , the CNY has appreciated a whopping 40 percent since 2005 against the USD .


Yes, a whopping 40% !

40% !!!



http://www.nytimes.com/2012/02/16/b...-in-chinas-currency-goes-largely-unnoted.html


Yet the CNY remains undervalued, relative to all other currencies, by 5 to 40 percent, according to various estimates.


If one had deposited your US$100,000 (in CNY equivalent) in a China bank in 2005 , it would be worth about US$160,000 (in CNY equivalent) in 2012 after forex gains + compounded interest .


The USD$ is on a downward projectory & trending . The CNY is going upwards .

The reality is on the wall.




PS- Not sure why there are so much fear about depositing money in a China bank . Why the hell would the China Government need to "confiscate" your money ? The China banking system is not the European Union or Cyprus.

The China bank are flushed with cash , safe & secured .

 

[cscs3]

Yuan appreciate not because it stronger but because other currency drop faster.

That is correct.

 

[cscs3]

Not sure why there are so much negative sentiments about investing in the CNY .... I suggest for a start, stop reading western news sources only. Be balanced , get the source from China & on the ground too .

Let's recap some Facts :

1) Most Western Banks + Governments are effectively bankrupt .
Trillion dollar deficits. Record debt levels. Bank account confiscation. Pension nationalization. Printing, printing, and more printing of money.
If the rating agencies S&P , Moody's were to rate the govt the same way they rate other entities , most Western Govt + Banks will be junk bond status.



2) Conversely , the China Government & Banks have the largest foreign reserves + gold in the world . China banks have ample liquidity reserves .

3) China banks currently pay saving interest rates of 3 to 4% pa.

4) Here's a question :guess what is the CNY relative appreciation against the USD$ since 2005 ?
5% , 7% or 10% ?

Come on guess.....
.
See Below
.
.
.
.


By 2012 , the CNY has appreciated a whopping 40 percent since 2005 against the USD .


Yes, a whopping 40% !

40% !!!



http://www.nytimes.com/2012/02/16/b...-in-chinas-currency-goes-largely-unnoted.html


Yet the CNY remains undervalued, relative to all other currencies, by 5 to 40 percent, according to various estimates.


If one had deposited your US$100,000 (in CNY equivalent) in a China bank in 2005 , it would be worth about US$160,000 (in CNY equivalent) in 2012 after forex gains + compounded interest .


The USD$ is on a downward projectory & trending . The CNY is going upwards .

The reality is on the wall.




PS- Not sure why there are so much fear about depositing money in a China bank . Why the hell would the China Government need to "confiscate" your money ? The China banking system is not the European Union or Cyprus.

The China bank are flushed with cash , safe & secured .

Problem is their reserves mostly in US$ !

 

[nokiatech]

Yuan appreciate not because it stronger but because other currency drop faster.

The difficulty with the above view is that the CNY has appreciated against ALL major currencies , both Weak AND also STRONG Currencies :

i) Weak Currencies that have dropped in value (e.g , USD$ , Euro )

ii) Strong Currencies that actually increased in value (e.g SGD$, NOK$ etc ).

The CNY has appreciated about 10% against the SGD$ as well since 2009 .
The CNY has appreciated about 15% against the NOK$ as well since 2009

Norway , (like Singapore) is also an extremely rich country with almost no sovereign debt and high bank reserves

Problem is their reserves mostly in US$ !

Really ?? I didn't know that !

When you say that the China Foreign Reserves is "mostly" in USD$ , how much percent % are you talking about ?
70% ?
80% ?

What do you mean by "mostly" ?

 

[hungryfriend]

which bank has the best rates now to save rmb?

 

[chekchek]

I am more interested in the direction of the rmb. Any expert here?

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[Perisher]

Are you really interested in it's direction or just it's outcome?

RMB will depend a lot on the growth of China, it's policy drive it's currency.
And it's growth drives it's policy. And it's growth is slowing, thereby it's policy will be worked towards reviving it's growth.
China's factory sector unexpectedly shrank for the first time in nearly 2-1/2 years in January and more slowdown lies ahead. This has raised expectations that policymakers will take more action to reverse this trend.

http://www.wsj.com/articles/yuan-rises-against-u-s-dollar-with-beijings-help-1426823620

http://brucewilds.blogspot.sg/2015/02/china-faces-flagging-growth.html

Basically, if you think China will continue to grow strongly, it's currency will rise slowly along with it. Otherwise easing the growth of it's currency whether willingly or as market dictates helps push growth too.

That's my very surface level of understanding.
Any other more expert views?

 

[chekchek]

Are you really interested in it's direction or just it's outcome?

RMB will depend a lot on the growth of China, it's policy drive it's currency.
And it's growth drives it's policy. And it's growth is slowing, thereby it's policy will be worked towards reviving it's growth.
China's factory sector unexpectedly shrank for the first time in nearly 2-1/2 years in January and more slowdown lies ahead. This has raised expectations that policymakers will take more action to reverse this trend.

http://www.wsj.com/articles/yuan-rises-against-u-s-dollar-with-beijings-help-1426823620

http://brucewilds.blogspot.sg/2015/02/china-faces-flagging-growth.html

Basically, if you think China will continue to grow strongly, it's currency will rise slowly along with it. Otherwise easing the growth of it's currency whether willingly or as market dictates helps push growth too.

That's my very surface level of understanding.
Any other more expert views?

Interested in both direction and outcome. Short term wise i have a small sum of rmb in china bank fix deposit at 3% due next month. Not sure if i want to continue. Long term wise i decided to retire over there. Had a small house over there as well. If i sell now i stand to lose about 20k sing dollar. Want to sell cos its double storey 40 year lease which both my wife and i regret buying. Going to look for a new unit next month. With exchange rate like this not sure to hold or not.

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[more3cm]

Had a small house over there as well. If i sell now i stand to lose about 20k sing dollar.

Wah the Chinese property market is quite bleak leh...

 

[focus1974]

Interested in both direction and outcome. Short term wise i have a small sum of rmb in china bank fix deposit at 3% due next month. Not sure if i want to continue. Long term wise i decided to retire over there. Had a small house over there as well. If i sell now i stand to lose about 20k sing dollar. Want to sell cos its double storey 40 year lease which both my wife and i regret buying. Going to look for a new unit next month. With exchange rate like this not sure to hold or not.

you can buy china residential propertY?

 

[hwmook]

you can buy china residential propertY?

Maybe wife is china citizen?

 

[hwmook]

Wah the Chinese property market is quite bleak leh...

The writings are already on the walls but those in it cannot see it.

 

[chekchek]

you can buy china residential propertY?

My wife.

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