All for the sake of maintaining a good relationship with their major trading partner.
Chart courtesy of Bloomberg – click to enlargen
Emerging Markets bond holdings.
A few sales – In my post on 19th August ‘No one learns any lessons’
My comment was that ‘anyone with any common sense would just dump Yuan – and convert to USD.’
To quote – ‘Problem is though – all central banks are holding Yuan and USD around 50:50 in their portfolios – to sell or not to sell – compromise a trading position and good relations with China – or just sell and save your own country.
Well – idiots are in control – so expect all countries to support China – at their peril.
Instead of allowing the market to be the adjudicator – the government is attempting to prove that the currency is ‘strong’ and maintain this impression.’
So we have a few emerging markets dumping USD Treasuries – including China in and effort to maintain the stability of the Yuan.
All is not good – next is to be a reduced trade figure – just to confirm everyone is going down the same plug hole ….
Yes – a one way trip.