Small Exchange: Challenges abroad for India, US
The week's currency news rounded up.
Indian non-residents finding it difficult to exchange old banknotes
Despite a deadline extension for non-resident Indians (NRI) to exchange outgoing bank notes, there are limitations as to where these individuals can make these exchanges, the New Indian Express reports.
The southern states of Kerala, Tamil Nadu and Andhra Pradesh account for almost a quarter (24.9%) of India's total NRI population and though there are two RBI offices in Kerala, neither accept banned notes.
Ministry of Overseas Indian Affairs chair professor S Irudaya Rajan says there is only one facility in the whole of south India to exchange outgoing bank notes. NRIs must travel to Chennai for a legal exchange.
"The ideal situation would be the government opens currency exchange centres at airports," he says.
US prosecutors charge ex-traders with rigging foreign exchange rates
Three ex-currency traders have been indicted on charges of conspiracy to manipulate forex banking rates, following the $2.5 billion worth of charges laid against JP Morgan, Citigroup and Barclays in 2015.
The US Department of Justice charged the men with conspiring to fix prices and rig bids for U.S. dollars and euros exchanged in the FX spot market.
The charge in the indictment carries a maximum penalty of 10 years in prison and a $1 million fine. The maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount is greater than $1 million.
The Department of Justice has now charged six individuals in the FX investigation.
Finance expert calls for less intervention in China's forex market
Writing in the China Securities Journal, Chinese Academy of Social Sciences finance expert Xiao Lisheng said his government should devalue the yuan and allow it to naturally return to stability.
China has been tightening rules governing foreign currency exchange to restrict outgoing capital.
The yuan lost 6.6% against the US dollar in 2016, the greatest annual loss since 1994.
"The more the government delays the release of depreciation pressure, the greater the impact and destructive power of the release of depreciation pressure will be," Xiao said.
The People's Bank of China permit the yuan to be traded in a band of 2% on either side of a daily rate.
Each week Small Exchange sums up currency news from around the globe and looks at how it impacts exchange rates and options.
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- Australian dollar hits two-year high
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- Small Exchange: India’s reserves pile higher, Pakistan devalues its currency and Uzbekistan trials new forex system