Small Exchange: China’s reserves soar, Nigeria tops up forex coffers and GBP hasn’t recovered
This week's currency news rounded up.
China's forex reserves climb above $US3 billion
As anticipated by deputy central bank governor Pan Gongsheng, China's foreign exchange reserves have risen above $US3 trillion, marking the second consecutive month of increases.
The South China Morning Post reports reserves rose by $US3.96 billion in March to total $US3.0091 trillion. This follows a rise of $US6.9 billion in February 2017.
This is the first back-to-back monthly rise since April 2016.
Earlier this year, in an effort to restrict outgoing capital, the Chinese government began tightening rules governing foreign currency exchange.
Nigeria continues to pump up foreign exchange
After rising to their highest levels in 18 months during March, the Central Bank of Nigeria (CBN) added a further $US418 million to its forex coffers.
CBN spokesperson Isaac Okorafor said the release of these funds was in addition to in addition to $US350 million sold as wholesale auction, BTA/PTA and school fees, P.M. News Nigeria reports.
"These significant injections of foreign exchange into the market should reassure all foreign exchange users of our determination to continue to meet all legitimate FX demand in the market, while striving to achieve exchange rate stability in the market," Okorafor said.
Despite the International Monetary Fund's (IMF) calls for Nigeria to repeal foreign exchange restrictions, the CBN said it will sustain its intervention, continuing to sell foreign exchange to all market segments.
GBP not in recovery just yet
Analysts and economists at one of Europe's biggest financial services companies argue its too soon to be thinking the Great British Pound (GBP) as on the road to recovery, following the announcement of Brexit and other global financial and political upsets.
PoundSterling Live reports that while the pound inched higher this past month, UniCredit Bank A.G foreign exchange strategist Kathrin Goretzki thinks "it is too early to turn bullish on the GBP".
UniCredit Bank A.G.'s latest data reveals net direct investment flows into the UK surged in 2016, particularly during the fourth quarter.
However, Goretzki argues this "should not be seen as evidence of a more-positive investment climate".
"The long-term investment horizon also implies a long planning phase. It is well possible that foreign direct investment occurring in the second half of 2016 was related to projects that had already been in the pipeline and were maybe accelerated in light of the GBP's depreciation," she said.
Each week Small Exchange sums up currency news from around the globe and looks into how it impacts exchange rates and options.
- TransferWise launches new foreign exchange solution for Australian businesses and opens its API
- Migrants to contribute $1.6 trillion to Australia’s GDP by 2050
- Ever felt ripped off by your bank? You could win $513
- How to save money this Lunar New Year
- Money hack: Save hundreds when sending money abroad