♠ Posted by Emmanuel in Currencies
at 9/20/2010 12:06:00 AM
Following my rapture on the revival of Japanese yen intervention after years and years of waiting (yes, I am a curious case), Reuters has a nifty new feature on what several other countries have done to, ah, "rationalize" the value of their currencies. It's in keeping with the Japanese national character IMHO: they are usually very mild-mannered, but when agitated, boy do they move. Many don't elicit the same sense of banzai amazement as Japanese intervention which is usually unbeatable in amount spent in a short space of time--effectiveness in limiting yen gains aside--make no mistake that several others are at it, too.What does it all mean? The last major bout of global currency intervention worldwide occurred was around 2006-07 when the dollar was really being socked in the foreign exchange market. At the moment, we seem to have a reprise as the United States has signalled no intention of raising interest rates or removing similarly accommodative, "quantitative easing" measures. Many have made this argument before, but don't these American policies represent as blatant currency intervention as the efforts of other countries? Speaking of which, verbal suggestions, suspected and actual intervention are rife:
More governments around the world are moving to keep their currencies from appreciating as a way of boosting their economic recovery, and as Japan intervened in the currency market on Wednesday for the first time in six years to curb the surging yen. Following are recent cases of direct or indirect government intervention in the currency markets, compiled by Reuters:The case of Serbia is interesting in that its main counterpart foreign currency is the euro. Insofar as the American authorities have a tacit "let her go" policy, the knock-on effect is of a number of former Eastern bloc countries targeting the value of the (strengthening) euro.
JAPAN INTERVENES FOR FIRST TIME SINCE 2004
* Prime minister signals Tokyo ready to keep intervening * Kan to meet President Obama in New York on Sept. 23
* Yen fell 3 pct on first day of gov't yen selling
* Tokyo sells more than 2 trillion yen ($23 bln) on Weds
SWITZERLAND GIVES NO HINT OF INTERVENTION
* Swiss National Bank keeps interest rate target steady
* Gives no hint it was about to resume currency intervention
* SNB pumped nearly 200 billion Swiss francs into markets via interventions from March 2009 but stopped in June this year
BRAZIL DEFENDS EXPORTERS
* Finance minister says will fight appreciation
* Real slumps 1.1 percent on intervention threats
* Brazil could use sovereign wealth fund to curb rally
COLOMBIA CENTRAL BANK BUYS DOLLARS
* Central bank to buy at least $20 mln daily
* Dollar purchases to start from Wednesday
* Accumulation of reserves to last at least four months
PERU EASES GRIP ON FUND OUTFLOW
* Pension funds allowed to hold more assets abroad
* Part of measures aimed at curbing rally in currency
* Latest move could boost demand for dollars
CHILE WARNS ON PESO, NO INTERVENTION YET
* Chile cenbank ups rate 50 bps, eye on peso
* Chile cenbank doesn't rule out intervention
* Chile peso rally may mean intervention
RUSSIA BOUGHT DOLLARS AND EUROS IN AUGUST
* Russia c.bank bought $1.1 bln and 135.6 mln euros in Aug
* C.bank purchases foreign currencies on the MICEX exchange to offset upward pressure on the rouble RUB
ROMANIAN INTERVENTION CITED AS LEU FIRMS
* C[entral] bank has intervened regularly against both weakening and firming since late 2008, to keep the leu in a tight range
SERB CBANK SELLS EUROS TO PROP UP DINAR
* Serbia sold 30 mln euros last week to support the dinar
* Cbank sold a total of 94.5 million euros in August
SOUTH KOREA SPOTTED BUYING DOLLARS
* Spotted buying small amount of dollars - dealers
* Move seen as aimed at keeping won below 1,160 per dollar
* Government frequently seen buying dollars this year
* Fin min: FX rates to be set by fundamentals
THAILAND TRYING TO SLOW BAHT GAINS
* Fin min says baht rise unavoidable
* Says central bank trying to slow gains
* Mulling relaxed FX rules to accelerate investment outlflows
So I ask you again: Who's the real manipulator here?
