Manicured children strut down the catwalk at<a href="https://www.wionews.com/world/beijings-new-multi-billion-dollar-starfish-airport-set-to-open-in-september-231977"> a Beijing</a> fashion show, one of the thousands of events driving huge demand for child models in China that insiders warn leaves minors vulnerable to physical abuse, 12 hour days and unrelenting pressure from pushy parents.

The kid's apparel market is growing faster than any other clothing sector in the country and was worth more than $40.5 billion in 2018 according to Euromonitor.&nbsp;

This combined with the rise of "kidfluencers" sponsored by brands to promote products on social media is spurring greater demand for young models but experts warn of the heavy cost of pursuing such deals.&nbsp;&nbsp;

"If children don't listen to the parents then I think hitting them is quite standard," Lee Ku, founder of Le Show Stars modelling school, told AFP.

A video of a mother kicking her three-year-old daughter in fury at her failure to comply during a modelling job went viral earlier this year, causing outrage online.

And footage emerged in early August online of a young boy modelling thick winter clothes outside as temperatures soared to 37 degrees Celsius, also drawing heavy online criticism.&nbsp;

But in an industry where minors can earn 10,000 yuan ($1,450)a session, Lee says the clip is the tip of the iceberg and that from his experience, such violent behaviour from parents was not unusual on shoots.

Child models sometimes go through more than 100 outfit changes in a session, often working from morning till night.&nbsp;

But mental health experts warn it is not just physical exhaustion they have to contend with there may be long term emotional implications.&nbsp;

"Children from the age of zero to six are mentally developing, they need a lot of exploration and freedom," explained child psychologist Gong Xueping.

"At work, the child model will deliberately show a lot of different expressions... but this is contrary to the child's feelings of the moment. This limits the development of both emotional abilities and more complex psychological abilities for children, so I think it's a very bad choice," Gong added.&nbsp;

Hundreds of competitions

But there remains no shortage of parents interested in pushing their children into the profession.

Founded three years ago, Le Show Stars was one of the first modelling schools in Beijing, where customers pay up to 800 yuan for private one on one lessons.

Four-year-old twins Yumi and Yuki Xiao are not yet professional models but for nearly two years they have been taking classes where they are taught how to pose and pace the catwalk in the hopes that they can break into the industry.

"For some catwalking competitions, they have to be in the makeup room by 6 am," their father Xiao Liang said.&nbsp;

"The real competition starts at 2 pm, and they finish around 3 pm or 4. So the whole thing takes a whole day. From 6 am to 6 pm, 12 hours is pretty standard."

Their parents invest in taking them around the country to compete in hundreds of national child modelling competitions.&nbsp;

"It's a lot of fun I like being on stage," insisted Yumi.

Like many other parents, Xiao says he initially enrolled the two in child modelling to build their self-confidence, but after Yumi and Yuki showed interest they started to invest more time and money into building a possible child modelling career path for them.

Occasionally the twins are paid to model seasonal fashion lines for big brands.

"I think they are one of a kind, firstly, they're twins, and they're also boy-girl twins," father Xiao says proudly.&nbsp;

"They also like it, which is why we are giving them this opportunity. I think they have a natural advantage over other kids," he added.&nbsp;

'Lost childhoods'

<a href="https://www.wionews.com/world/chinese-human-rights-lawyer-lands-in-us-despite-travel-ban-240624">China's laws</a> around child labour are complicated and parents of underage models are sometimes paid in secret to sidestep the red tape required to employ them.&nbsp;

Responding to the kicking video, Hangzhou authorities introduced regulations to limit the hour's children's work and ban children under 10 from being brand spokespeople.&nbsp;

But many feel authorities are doing too little to protect kids from exploitation.&nbsp;

More than 110 child retailers on e-commerce giant Taobao said they would scale back the use of young models, and also demanded more regulations.

Thousands have debated the topic online, calling for rules to be tightened to prevent abuse.&nbsp;

"To me, child models are nothing different from child labour. They have to finish their work no matter how tired they are when other children are playing and their short childhoods are lost making money for their parents. I suggest that we step up legislation...to protect their rights and interests," one Weibo user said.

Another commented some parents see their offspring only as a "money-making tool" adding: "The only way is to strengthen regulation, supervision, and protection."

Xiao and his wife Bai Yu said they were aware of the potential pitfalls of the profession and any decision to pursue the profession would be up to their son and daughter.&nbsp;

He said: "If they study well and they are interested in the prospect (of being a model), then I am sure to be 100 per cent supportive, as long as they are willing to spend their energy in this area." 
&nbsp;

Manicured children strut down the catwalk at a Beijing fashion show, one of the thousands of events driving huge demand for child models in China that insiders warn leaves minors vulnerable to physical abuse, 12 hour days and unrelenting pressure from pushy parents.

Manicured children strut down the catwalk at a Beijing fashion show, one of the thousands of events driving huge demand for child models in China that insiders warn leaves minors vulnerable to physical abuse, 12 hour days and unrelenting pressure from pushy parents. The kid's apparel market is growing faster than any other clothing sector in the country and was worth more than $40.5 billion in 2018 according to Euromonitor. This combined with the rise of "kidfluencers" sponsored by brands to promote products on social media is spurring greater demand for young models but experts warn of the heavy cost of pursuing such deals. "If children don't listen to the parents then I think hitting them is quite standard," Lee Ku, founder of Le Show Stars modelling school, told AFP. A video of a mother kicking her three-year-old daughter in fury at her failure to comply during a modelling job went viral earlier this year, causing outrage online. And footage emerged in early August online of a young boy modelling thick winter clothes outside as temperatures soared to 37 degrees Celsius, also drawing heavy online criticism. But in an industry where minors can earn 10,000 yuan ($1,450)a session, Lee says the clip is the tip of the iceberg and that from his experience, such violent behaviour from parents was not unusual on shoots. Child models sometimes go through more than 100 outfit changes in a session, often working from morning till night. But mental health experts warn it is not just physical exhaustion they have to contend with there may be long term emotional implications. "Children from the age of zero to six are mentally developing, they need a lot of exploration and freedom," explained child psychologist Gong Xueping. "At work, the child model will deliberately show a lot of different expressions... but this is contrary to the child's feelings of the moment. This limits the development of both emotional abilities and more complex psychological abilities for children, so I think it's a very bad choice," Gong added. Hundreds of competitions But there remains no shortage of parents interested in pushing their children into the profession. Founded three years ago, Le Show Stars was one of the first modelling schools in Beijing, where customers pay up to 800 yuan for private one on one lessons. Four-year-old twins Yumi and Yuki Xiao are not yet professional models but for nearly two years they have been taking classes where they are taught how to pose and pace the catwalk in the hopes that they can break into the industry. "For some catwalking competitions, they have to be in the makeup room by 6 am," their father Xiao Liang said. "The real competition starts at 2 pm, and they finish around 3 pm or 4. So the whole thing takes a whole day. From 6 am to 6 pm, 12 hours is pretty standard." Their parents invest in taking them around the country to compete in hundreds of national child modelling competitions. "It's a lot of fun I like being on stage," insisted Yumi. Like many other parents, Xiao says he initially enrolled the two in child modelling to build their self-confidence, but after Yumi and Yuki showed interest they started to invest more time and money into building a possible child modelling career path for them. Occasionally the twins are paid to model seasonal fashion lines for big brands. "I think they are one of a kind, firstly, they're twins, and they're also boy-girl twins," father Xiao says proudly. "They also like it, which is why we are giving them this opportunity. I think they have a natural advantage over other kids," he added. 'Lost childhoods' China's laws around child labour are complicated and parents of underage models are sometimes paid in secret to sidestep the red tape required to employ them. Responding to the kicking video, Hangzhou authorities introduced regulations to limit the hour's children's work and ban children under 10 from being brand spokespeople. But many feel authorities are doing too little to protect kids from exploitation. More than 110 child retailers on e-commerce giant Taobao said they would scale back the use of young models, and also demanded more regulations. Thousands have debated the topic online, calling for rules to be tightened to prevent abuse. "To me, child models are nothing different from child labour. They have to finish their work no matter how tired they are when other children are playing and their short childhoods are lost making money for their parents. I suggest that we step up legislation...to protect their rights and interests," one Weibo user said. Another commented some parents see their offspring only as a "money-making tool" adding: "The only way is to strengthen regulation, supervision, and protection." Xiao and his wife Bai Yu said they were aware of the potential pitfalls of the profession and any decision to pursue the profession would be up to their son and daughter. He said: "If they study well and they are interested in the prospect (of being a model), then I am sure to be 100 per cent supportive, as long as they are willing to spend their energy in this area."

China's child modelling industry booms amid controversy

As many as 61 people have been killed and 356,000 evacuated from their homes as <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/india-news/india-meteorological-department-predicts-heavy-rainfall-in-uttarakhand-234250&amp;sa=U&amp;ved=2ahUKEwiAl9fF0K7jAhVHOI8KHeLABCoQFjAAegQIBhAC&amp;usg=AOvVaw0nEIe14UATZj3_vXQKagtq">heavy rain</a> and floods swept through large parts of southern and central <a href="https://www.google.com/url?client=internal-uds-cse&amp;cx=006054055338965708568:09spwrlibei&amp;q=https://www.wionews.com/photos/why-china-is-afraid-of-us-abrams-tanks-to-be-delivered-to-taiwan-234260&amp;sa=U&amp;ved=2ahUKEwiUmrOX0a7jAhUIPo8KHSvgA9oQFjADegQIDhAC&amp;usg=AOvVaw1_IOikyabaOWXicQ1MdY4T">China</a> this week, Chinese rescue authorities said.

In a notice published late on Thursday, China's Ministry of Emergency Management said 9,300 homes have collapsed and 371,100 hectares of farmland damaged during the floods, with direct economic losses now estimated at 13.35 billion yuan ($1.93 billion).

It said more than 4,300 people had been rescued from floodwaters, which have affected regions stretching from Guangdong province in the southeast to southwest China's Chongqing on the upper reaches of the Yangtze river.

During the summer, China routinely suffers from droughts in the far north and <a href="https://www.wionews.com/world/heavy-rains-flood-new-orleans-streets-forecasters-predict-hurricane-234833">flood</a>s in the south.

The emergency ministry has warned that northern regions face even lower precipitation levels this year, while heavy rains are expected to raise flood risks on the Yellow river's upstream.

As many as 61 people have been killed and 356,000 evacuated from their homes as heavy rain and floods swept through large parts of southern and central China this week, Chinese rescue authorities said.

As many as 61 people have been killed and 356,000 evacuated from their homes as heavy rain and floods swept through large parts of southern and central China this week, Chinese rescue authorities said. In a notice published late on Thursday, China's Ministry of Emergency Management said 9,300 homes have collapsed and 371,100 hectares of farmland damaged during the floods, with direct economic losses now estimated at 13.35 billion yuan ($1.93 billion). It said more than 4,300 people had been rescued from floodwaters, which have affected regions stretching from Guangdong province in the southeast to southwest China's Chongqing on the upper reaches of the Yangtze river. During the summer, China routinely suffers from droughts in the far north and floods in the south. The emergency ministry has warned that northern regions face even lower precipitation levels this year, while heavy rains are expected to raise flood risks on the Yellow river's upstream.

At least 61 killed in floods; 350,000 evacuated: China rescue authorities

China's central bank chief said Friday the country has <a href="https://www.wionews.com/world/explainer-us-china-trade-war-the-levers-they-can-pull-224809">plenty of policy tools left to handle the trade war</a> with the United States.

There is "tremendous" room to counter the deepening trade war, People's Bank of China governor Yi Gang said in an interview with Bloomberg TV.

"We have plenty of room in interest rates, we have plenty of room in required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous," Yi said on Bloomberg TV.

<a href="https://www.wionews.com/world/china-warns-its-companies-on-us-travel-rebuffs-trade-criticism-224200">Ties between China and the US</a> have deteriorated sharply after trade negotiations stalled last month without a deal to lift bruising tariffs on goods worth $360 billion in two-way trade.

China said Thursday that it would soon release detailed information about a planned blacklist of "unreliable" foreign companies and individuals, that analysts expect will target firms cutting off supplies to <a href="https://www.wionews.com/world/amid-us-china-row-huawei-signs-deal-with-russian-telecom-company-mts-to-develop-5g-network-224867">Chinese tech giant Huawei</a>.

Last month the US Commerce Department placed Huawei and dozens of its affiliates on an "entity list" on grounds of national security, curbing its access to crucial US-made components and software -- through a 90-day reprieve was later issued.

Yi has participated in several rounds of the trade negotiations with Washington and is scheduled to meet with US Treasury Secretary Steven Mnuchin this weekend during the G20 gathering of financial policymakers in Japan.

He said the meeting with Mnuchin would be "productive talk, as always," but trade war discussions would be "uncertain and difficult", according to Bloomberg News.

Watch: IMF's Lagarde warns of 'growing concerns' over trade tensions

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China's yuan, or renminbi, the currency has also rapidly depreciated against the dollar as trade tensions have ramped up in recent weeks, nearing the critical seven to the dollar exchange rate.

The central bank has long prevented the yuan from falling below seven, but Yi hinted the bank may no longer defend the currency at that level.

"I don't think along this mathematical scale any number is more important (than) the other number," he said.

"The trade war would have a temporary depreciation pressure on the renminbi, but you see, after the noise, (the) renminbi will continue to be very stable and relatively strong compared to emerging market currencies, even compared to convertible currencies," he told Bloomberg TV.

"I'm very confident (the) renminbi will continue to be stable at a more or less equilibrium level," Yi said.

China's central bank chief said Friday the country has plenty of policy tools left to handle the trade war with the United States. There is "tremendous" room to counter the deepening trade war, People's Bank of China governor Yi Gang said in an interview with Bloomberg TV.

China's central bank chief said Friday the country has plenty of policy tools left to handle the trade war with the United States. There is "tremendous" room to counter the deepening trade war, People's Bank of China governor Yi Gang said in an interview with Bloomberg TV. "We have plenty of room in interest rates, we have plenty of room in required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous," Yi said on Bloomberg TV. Ties between China and the US have deteriorated sharply after trade negotiations stalled last month without a deal to lift bruising tariffs on goods worth $360 billion in two-way trade. China said Thursday that it would soon release detailed information about a planned blacklist of "unreliable" foreign companies and individuals, that analysts expect will target firms cutting off supplies to Chinese tech giant Huawei. Last month the US Commerce Department placed Huawei and dozens of its affiliates on an "entity list" on grounds of national security, curbing its access to crucial US-made components and software -- through a 90-day reprieve was later issued. Yi has participated in several rounds of the trade negotiations with Washington and is scheduled to meet with US Treasury Secretary Steven Mnuchin this weekend during the G20 gathering of financial policymakers in Japan. He said the meeting with Mnuchin would be "productive talk, as always," but trade war discussions would be "uncertain and difficult", according to Bloomberg News. Watch: IMF's Lagarde warns of 'growing concerns' over trade tensions × China's yuan, or renminbi, the currency has also rapidly depreciated against the dollar as trade tensions have ramped up in recent weeks, nearing the critical seven to the dollar exchange rate. The central bank has long prevented the yuan from falling below seven, but Yi hinted the bank may no longer defend the currency at that level. "I don't think along this mathematical scale any number is more important (than) the other number," he said. "The trade war would have a temporary depreciation pressure on the renminbi, but you see, after the noise, (the) renminbi will continue to be very stable and relatively strong compared to emerging market currencies, even compared to convertible currencies," he told Bloomberg TV. "I'm very confident (the) renminbi will continue to be stable at a more or less equilibrium level," Yi said.

China has tools to handle trade war with US: Central bank chief Yi Gang

<a href="https://www.wionews.com/world/china-slams-us-lies-about-huaweis-government-ties-221382">China's</a> banking and insurance regulator on Saturday said it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer "heavy losses" if they bet against the currency.

The yuan has lost more than 2.5% against the dollar since the festering <a href="https://www.wionews.com/world/imf-warns-us-china-trade-war-will-jeopardize-2019-global-growth-221117">China-US trade dispute</a> intensified earlier this month. It is now less than a tenth of a yuan away from the 7-per-dollar level authorities have in the past indicated as a floor.

"Short-term fluctuation of the yuan exchange rate is normal, but in the long-run, China's economic fundamentals determine that the yuan will not depreciate persistently," Xiao Yuanqi, the spokesman for the China Banking and Insurance Regulatory Commission (CBIRC), told a finance forum in Beijing.

"Those who speculate and short the yuan will for sure suffer heavy loss."

Xiao was reading from a script prepared for Guo Shuqing, CBIRC's chairman and the Communist Party chief of the People's Bank of China (PBOC). Guo was scheduled to give a speech at the same forum but couldn't make it due to last minute arrangements.

Xiao also said Beijing must look out for hot money moving in and out of the country, as well as large amounts of capital flowing into the frothy real estate market.

"We must be especially vigilant about money from overseas moving in and out in large quantities, and hot speculative money, and we must resolutely fight bubbles in real estate and financial assets," he said.

Chinese policymakers have struggled to manage bubble risks in the property market, the world's largest, without hurting growth in the sector, which is crucial for the wider economy.

China's banking and insurance regulator on Saturday said it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer "heavy losses" if they bet against the currency.

China's banking and insurance regulator on Saturday said it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer "heavy losses" if they bet against the currency. The yuan has lost more than 2.5% against the dollar since the festering China-US trade dispute intensified earlier this month. It is now less than a tenth of a yuan away from the 7-per-dollar level authorities have in the past indicated as a floor. "Short-term fluctuation of the yuan exchange rate is normal, but in the long-run, China's economic fundamentals determine that the yuan will not depreciate persistently," Xiao Yuanqi, the spokesman for the China Banking and Insurance Regulatory Commission (CBIRC), told a finance forum in Beijing. "Those who speculate and short the yuan will for sure suffer heavy loss." Xiao was reading from a script prepared for Guo Shuqing, CBIRC's chairman and the Communist Party chief of the People's Bank of China (PBOC). Guo was scheduled to give a speech at the same forum but couldn't make it due to last minute arrangements. Xiao also said Beijing must look out for hot money moving in and out of the country, as well as large amounts of capital flowing into the frothy real estate market. "We must be especially vigilant about money from overseas moving in and out in large quantities, and hot speculative money, and we must resolutely fight bubbles in real estate and financial assets," he said. Chinese policymakers have struggled to manage bubble risks in the property market, the world's largest, without hurting growth in the sector, which is crucial for the wider economy.

China's top banking regulator says yuan bears will suffer 'heavy losses'

China's top central banker signalled that Beijing and Washington are getting close to reaching a currency deal as part of their continuing negotiations to settle a yearlong trade battle, according to a Dow Jones news report supplied to EFE on Sunday.&nbsp;

"Both sides have reached consensus on many crucial and important issues, " People's Bank of China Gov. Yi Gang said at a news conference Sunday, held on the sidelines of the nation's annual legislative session.&nbsp;

As part of the accord, Yi said, China won't engage in competitive devaluation to give Chinese exporters a leg up in foreign markets--a commitment Chinese officials have also made in multilateral agreements such as those among the Group of 20 industrial nations. "This is what we promised," he emphasized. "Absolutely we won't do this."&nbsp;

How China manages its currency has been a point of contention between Washington and Beijing for years. President Trump was vocal throughout his election campaign in saying China manipulates the yuan to gain an advantage in trade by making its products relatively cheaper. Trump repeated the charge last year when the yuan's plunge aroused suspicion that Beijing was pushing down its value to offset US&nbsp;tariffs on Chinese products.&nbsp;

In recent trade talks, US&nbsp;negotiators pushed their Chinese counterparts to keep the yuan stable and to improve transparency in currency-market interventions by China's central bank. During a congressional hearing late last month, US&nbsp;Trade Representative Robert Lighthizer said, "we have spent a lot of time on currency and the agreement will be enforceable."&nbsp;

Still, how the currency deal, if reached, will be enforced remains unclear. Both sides are haggling over an enforcement mechanism for the broader trade agreement. A senior Chinese trade negotiator, Wang Shouwen, told reporters Saturday that any such system must be "two-way, fair and equal."&nbsp;

At Sunday's news conference, Yi said both sides have discussed how they should disclose information when they buy or sell in foreign-exchange markets according to rules set by the International Monetary Fund. Another point of discussion, he said, involves how both nations should respect the autonomy of each other's monetary policy.&nbsp;

That latter issue is of deepening concern to the PBOC because it doesn't want a pledge to keep the yuan steady to tie its hands in supporting economic growth by loosening credit policy. Letting more yuan funds flow into the economy could pressure the value of the yuan.&nbsp;

The PBOC mainly looks at domestic factors when setting monetary policy, Yi said. "The exchange rate isn't a major factor in domestic monetary policy."&nbsp;

Many analysts and investors note that China's promise not to engage in competitive devaluation isn't much of a concession to the US. For a decade, China allowed a largely undervalued yuan to appreciate. After that appreciation trajectory ended in 2015, the yuan started to come under greater pressure, and the Chinese central bank has frequently intervened to prevent the currency from falling too much.&nbsp;

Too sharp of a depreciation, Chinese officials fear, could prod businesses and investors to move money offshore, potentially destabilizing a financial system already struggling with rising debt woes.&nbsp;

At the media briefing, Yi pointed to the central bank's effort to keep the yuan stable in recent years, noting that it had burned through $1 trillion of its foreign-exchange reserves to defend the currency.&nbsp;

The Chinese central banker also sought to temper investors' expectations for more aggressive monetary easing to prop up the slowing economy. A "neutral" monetary stance, Yi said, means that China will keep its overall leverage ratio stable.&nbsp;

In the past year, the central bank cut the amount of cash banks must keep in reserve five times, in a bid to unleash more funds for lenders to make loans. There is still room for such reserve-requirement reductions this year, Yi said, though the room has narrowed.&nbsp;

He also said the central bank will continue to foster competition among banks as a way to lower lending rates, but he gave no indication that any reduction in benchmark interest rates are in the cards. At the end of last year, credit amounted to 249.4% of China's gross domestic product, he said, which was 1.5 percentage points lower than the level as of the end of 2017.&nbsp;

China's top central banker signalled that Beijing and Washington are getting close to reaching a currency deal as part of their continuing negotiations to settle a yearlong trade battle, according to a Dow Jones news report supplied to EFE on Sunday.

China's top central banker signalled that Beijing and Washington are getting close to reaching a currency deal as part of their continuing negotiations to settle a yearlong trade battle, according to a Dow Jones news report supplied to EFE on Sunday. "Both sides have reached consensus on many crucial and important issues, " People's Bank of China Gov. Yi Gang said at a news conference Sunday, held on the sidelines of the nation's annual legislative session. As part of the accord, Yi said, China won't engage in competitive devaluation to give Chinese exporters a leg up in foreign markets--a commitment Chinese officials have also made in multilateral agreements such as those among the Group of 20 industrial nations. "This is what we promised," he emphasized. "Absolutely we won't do this." How China manages its currency has been a point of contention between Washington and Beijing for years. President Trump was vocal throughout his election campaign in saying China manipulates the yuan to gain an advantage in trade by making its products relatively cheaper. Trump repeated the charge last year when the yuan's plunge aroused suspicion that Beijing was pushing down its value to offset US tariffs on Chinese products. In recent trade talks, US negotiators pushed their Chinese counterparts to keep the yuan stable and to improve transparency in currency-market interventions by China's central bank. During a congressional hearing late last month, US Trade Representative Robert Lighthizer said, "we have spent a lot of time on currency and the agreement will be enforceable." Still, how the currency deal, if reached, will be enforced remains unclear. Both sides are haggling over an enforcement mechanism for the broader trade agreement. A senior Chinese trade negotiator, Wang Shouwen, told reporters Saturday that any such system must be "two-way, fair and equal." At Sunday's news conference, Yi said both sides have discussed how they should disclose information when they buy or sell in foreign-exchange markets according to rules set by the International Monetary Fund. Another point of discussion, he said, involves how both nations should respect the autonomy of each other's monetary policy. That latter issue is of deepening concern to the PBOC because it doesn't want a pledge to keep the yuan steady to tie its hands in supporting economic growth by loosening credit policy. Letting more yuan funds flow into the economy could pressure the value of the yuan. The PBOC mainly looks at domestic factors when setting monetary policy, Yi said. "The exchange rate isn't a major factor in domestic monetary policy." Many analysts and investors note that China's promise not to engage in competitive devaluation isn't much of a concession to the US. For a decade, China allowed a largely undervalued yuan to appreciate. After that appreciation trajectory ended in 2015, the yuan started to come under greater pressure, and the Chinese central bank has frequently intervened to prevent the currency from falling too much. Too sharp of a depreciation, Chinese officials fear, could prod businesses and investors to move money offshore, potentially destabilizing a financial system already struggling with rising debt woes. At the media briefing, Yi pointed to the central bank's effort to keep the yuan stable in recent years, noting that it had burned through $1 trillion of its foreign-exchange reserves to defend the currency. The Chinese central banker also sought to temper investors' expectations for more aggressive monetary easing to prop up the slowing economy. A "neutral" monetary stance, Yi said, means that China will keep its overall leverage ratio stable. In the past year, the central bank cut the amount of cash banks must keep in reserve five times, in a bid to unleash more funds for lenders to make loans. There is still room for such reserve-requirement reductions this year, Yi said, though the room has narrowed. He also said the central bank will continue to foster competition among banks as a way to lower lending rates, but he gave no indication that any reduction in benchmark interest rates are in the cards. At the end of last year, credit amounted to 249.4% of China's gross domestic product, he said, which was 1.5 percentage points lower than the level as of the end of 2017.

US, China near deal; Beijing vows not to devalue Yuan to help exports

The US could remove India from its currency monitoring list of major trading partners, the Treasury Department has said, citing certain developments and steps being taken by New Delhi which address some of its major concerns.

<a href="http://www.wionews.com/world/concerned-over-chinas-lack-of-currency-transparency-us-172036">Also Read:&nbsp;Concerned over China's lack of currency transparency, says </a><a href="http://www.wionews.com/world/concerned-over-chinas-lack-of-currency-transparency-us-172036">US</a>

India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in April along with five other countries - China, Germany, Japan, South Korea and Switzerland.

The Department of Treasury maintained the same monitoring list in its latest report released on Wednesday but said if India continues with the same practices as in the last six months, it would be removed from its next bi-annual report.

"India's circumstances have shifted markedly, as the central bank's net sales of foreign exchange over the first six months of 2018 led net purchases over the four quarters through June 2018 to fall to $4 billion, or 0.2 per cent of the GDP," the Treasury said in its latest semi-annual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the US.

This represented a notable change from 2017, when purchases over the first three quarters of the year pushed net purchases of foreign exchange above two per cent of the GDP, it said.

Recent sales have come amidst a turnaround in foreign portfolio flows, as foreign investors pulled portfolio capital out of India (and many other emerging markets) over the first half of the year, it said.

The rupee depreciated by around seven per cent against the dollar and by more than four per cent on a real effective basis in the first half of 2018, the report said.

India has a significant bilateral goods trade surplus with the US, totalling $23 billion over the four quarters through June 2018, but India's current account is in deficit at 1.9 per cent of the GDP.

"As a result, India now only meets one of the three criteria from the 2015 Act. If this remains the case at the time of its next report, Treasury would remove India from the monitoring list," the Treasury said.

Observing that India's current account deficit widened in the four quarters through June 2018 to 1.9 per cent of the GDP, following several years of narrowing from its 2012 peak, the Treasury said the current account deficit has been driven by a large and persistent goods trade deficit, which has, in turn, resulted from substantial gold and petroleum imports.

The goods trade deficit has widened out in the first half to 6.4 per cent of the GDP as oil prices have risen.

The IMF projects the current account deficit to be around 2.5 per cent of the GDP over the medium term as domestic demand strengthens further and favourable growth prospects support investment.

India's goods trade surplus with the US was $23 billion for the four quarters through June 2018, it said, adding that India also had a small surplus in services trade with the US of USD 4 billion over the same period.

"India's exports to the US are concentrated in sectors that reflect India's global specialisation (notably pharmaceuticals and IT services), while US exports to India are dominated by key service trade categories, particularly travel and higher education," the report said.

The Treasury praised India for being "exemplary" in publishing its foreign exchange market intervention.

The Reserve Bank of India (RBI) has noted that the value of the rupee is broadly market-determined, with intervention used only during "episodes of undue volatility," it said.

According to the authorities' data, India was generally a net purchaser of foreign exchange from late 2013 to the middle of 2017, as the RBI sought to gradually build a stronger external buffer in the aftermath of the May 2013 "taper tantrum".

Purchases accelerated in the first half of 2017 amidst strong portfolio inflows to India (and many other emerging markets); as a result, cumulative net purchases of foreign exchange exceeded two per cent of the GDP over 2017, it said.

Noting that foreign exchange purchases generally declined in the second half of 2017, and the RBI shifted to selling foreign exchange in the first half of 2018, the Treasury said net purchases of foreign exchange over the past four quarters through June totalled $ 4 billion (0.2 per cent of the GDP), including activity in the forward market.

"Sales of foreign exchange in the first half of this year came in the context of foreign portfolio outflows of $ 7&nbsp;billion, as India experienced outflows (particularly of foreign portfolio debt) that were witnessed across many emerging markets in the second quarter," it said.

This mirrored the pattern of the last few years, in which intervention has typically tracked institutional portfolio flows. India maintains ample reserves according to the IMF metrics for reserve adequacy, particularly given that India maintains some controls on both inbound and outbound flows of private capital.

As of June 2018, foreign currency reserves stood at $380 billion, equal to 3.7 times gross short-term external debt, 8 months of import cover, and 14 per cent of the GDP.

"The rupee depreciated 7 per cent against the dollar in the first half of the year, while the real effective exchange rate also reversed its general uptrend from the last few years, depreciating by four per cent," it said.

The US could remove India from its currency monitoring list of major trading partners, the Treasury Department has said, citing certain developments and steps being taken by New Delhi which address some of its major concerns.

The US could remove India from its currency monitoring list of major trading partners, the Treasury Department has said, citing certain developments and steps being taken by New Delhi which address some of its major concerns. Also Read: Concerned over China's lack of currency transparency, says US India for the first time was placed by the US in its currency monitoring list of countries with potentially questionable foreign exchange policies in April along with five other countries - China, Germany, Japan, South Korea and Switzerland. The Department of Treasury maintained the same monitoring list in its latest report released on Wednesday but said if India continues with the same practices as in the last six months, it would be removed from its next bi-annual report. "India's circumstances have shifted markedly, as the central bank's net sales of foreign exchange over the first six months of 2018 led net purchases over the four quarters through June 2018 to fall to $4 billion, or 0.2 per cent of the GDP," the Treasury said in its latest semi-annual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the US. This represented a notable change from 2017, when purchases over the first three quarters of the year pushed net purchases of foreign exchange above two per cent of the GDP, it said. Recent sales have come amidst a turnaround in foreign portfolio flows, as foreign investors pulled portfolio capital out of India (and many other emerging markets) over the first half of the year, it said. The rupee depreciated by around seven per cent against the dollar and by more than four per cent on a real effective basis in the first half of 2018, the report said. India has a significant bilateral goods trade surplus with the US, totalling $23 billion over the four quarters through June 2018, but India's current account is in deficit at 1.9 per cent of the GDP. "As a result, India now only meets one of the three criteria from the 2015 Act. If this remains the case at the time of its next report, Treasury would remove India from the monitoring list," the Treasury said. Observing that India's current account deficit widened in the four quarters through June 2018 to 1.9 per cent of the GDP, following several years of narrowing from its 2012 peak, the Treasury said the current account deficit has been driven by a large and persistent goods trade deficit, which has, in turn, resulted from substantial gold and petroleum imports. The goods trade deficit has widened out in the first half to 6.4 per cent of the GDP as oil prices have risen. The IMF projects the current account deficit to be around 2.5 per cent of the GDP over the medium term as domestic demand strengthens further and favourable growth prospects support investment. India's goods trade surplus with the US was $23 billion for the four quarters through June 2018, it said, adding that India also had a small surplus in services trade with the US of USD 4 billion over the same period. "India's exports to the US are concentrated in sectors that reflect India's global specialisation (notably pharmaceuticals and IT services), while US exports to India are dominated by key service trade categories, particularly travel and higher education," the report said. The Treasury praised India for being "exemplary" in publishing its foreign exchange market intervention. The Reserve Bank of India (RBI) has noted that the value of the rupee is broadly market-determined, with intervention used only during "episodes of undue volatility," it said. According to the authorities' data, India was generally a net purchaser of foreign exchange from late 2013 to the middle of 2017, as the RBI sought to gradually build a stronger external buffer in the aftermath of the May 2013 "taper tantrum". Purchases accelerated in the first half of 2017 amidst strong portfolio inflows to India (and many other emerging markets); as a result, cumulative net purchases of foreign exchange exceeded two per cent of the GDP over 2017, it said. Noting that foreign exchange purchases generally declined in the second half of 2017, and the RBI shifted to selling foreign exchange in the first half of 2018, the Treasury said net purchases of foreign exchange over the past four quarters through June totalled $ 4 billion (0.2 per cent of the GDP), including activity in the forward market. "Sales of foreign exchange in the first half of this year came in the context of foreign portfolio outflows of $ 7 billion, as India experienced outflows (particularly of foreign portfolio debt) that were witnessed across many emerging markets in the second quarter," it said. This mirrored the pattern of the last few years, in which intervention has typically tracked institutional portfolio flows. India maintains ample reserves according to the IMF metrics for reserve adequacy, particularly given that India maintains some controls on both inbound and outbound flows of private capital. As of June 2018, foreign currency reserves stood at $380 billion, equal to 3.7 times gross short-term external debt, 8 months of import cover, and 14 per cent of the GDP. "The rupee depreciated 7 per cent against the dollar in the first half of the year, while the real effective exchange rate also reversed its general uptrend from the last few years, depreciating by four per cent," it said.

May remove India from currency monitoring list: US Treasury Department

China's Heilongjiang Province allocated and transported 15 million yuan in cash to Russia&nbsp;on Tuesday, marking the official establishment of a land route of transporting cash from&nbsp;China&nbsp;to Russia.

The trucks loaded with boxes of cash left&nbsp;China&nbsp;for Russia through Dongning Port in the city of Dongning, northeast&nbsp;China's Heilongjiang Province.

The cash transport is designed to meet the growing demand for the Chinese currency in Russia's Far East. The use of the renminbi will not only reduce foreign exchange costs and risks, bus also reduce the fees charged on cash payments in the renminbi market in Russia.

"Cross-border RMB settlements have changed the previous mode in which the US dollar is the only settlement currency in Sino-Russian economic and trade activities, achieving a diversified settlement mode for renminbi and ruble," said Wang Shoubin, the Director of the Finance Office of Dongning City.

Heilongjiang reported a 47.7 per cent annual growth in its trade with Russia in the first quarter of the year, with trade value reaching 27.1 billion yuan (about 4.3 billion US&nbsp;dollars).

"The thriving of Sino-Russian border trade has become a key driving force in promoting the healthy economic and social development in the neighbouring areas of&nbsp;China&nbsp;and Russia," Wang added.

According to Zhang Jianhui, chairman of Longjiang Bank, the cash transport will become more and more regular, to satisfy Russia's demand for renminbi cash.

The trucks loaded with boxes of cash left China for Russia through Dongning Port in the city of Dongning

China's Heilongjiang Province allocated and transported 15 million yuan in cash to Russia on Tuesday, marking the official establishment of a land route of transporting cash from China to Russia. The trucks loaded with boxes of cash left China for Russia through Dongning Port in the city of Dongning, northeast China's Heilongjiang Province. The cash transport is designed to meet the growing demand for the Chinese currency in Russia's Far East. The use of the renminbi will not only reduce foreign exchange costs and risks, bus also reduce the fees charged on cash payments in the renminbi market in Russia. "Cross-border RMB settlements have changed the previous mode in which the US dollar is the only settlement currency in Sino-Russian economic and trade activities, achieving a diversified settlement mode for renminbi and ruble," said Wang Shoubin, the Director of the Finance Office of Dongning City. Heilongjiang reported a 47.7 per cent annual growth in its trade with Russia in the first quarter of the year, with trade value reaching 27.1 billion yuan (about 4.3 billion US dollars). "The thriving of Sino-Russian border trade has become a key driving force in promoting the healthy economic and social development in the neighbouring areas of China and Russia," Wang added. According to Zhang Jianhui, chairman of Longjiang Bank, the cash transport will become more and more regular, to satisfy Russia's demand for renminbi cash.

China transports15 million yuan in cash to Russia

According&nbsp;to fresh reports, Pakistan Senate&#39;s motion to declare Chinese as an official language was misreported.

The official motion &quot;recommends&quot; Chinese language courses for Pakistan&#39;s CPEC human resource in the wake of &quot;growing collaboration&quot;&nbsp;between the two countries.&nbsp;

&quot;This House recommends that in view of the growing collaboration between Pakistan and China under the CPEC, courses of the Official Chinese Language should be launched for all current and prospective Pakistani CPEC human resource in order to overcome any costly communication barriers,&quot; reads the official motion.&nbsp;

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<blockquote class="twitter-tweet" data-lang="en">
Chinese has not been made official language of Pakistan. It was misleading report by a few media outlets. Here is the actual resolution tabled in Senate <a href="https://t.co/SzwZ6nQWqe">pic.twitter.com/SzwZ6nQWqe</a>
&mdash; Adeel Raja (@adeelraja) <a href="https://twitter.com/adeelraja/status/965872070272913408?ref_src=twsrc%5Etfw">February 20, 2018</a></blockquote>
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China has invested heavily in the CPEC project linking Pakistan&#39;s Gwadar port with China&#39;s western Xinjiang region.&nbsp;

Last year, China and Pakistan had laid the framework for the One Belt, One Road(OBOR) initiative&nbsp;also known as the &quot;Silk Road Economic Belt&quot;&nbsp;and had signed several agreements worth over $50 billion which included developing the Gwadar port and airport in Balochistan province, upgrading the main railway track between Karachi and Peshawar in order to further trade.

The two countries have also signed an MoU for the establishment of a dry port in Havelian.

Last year, China had hosted a high-profile event in Beijing called the &nbsp;Belt and Road Forum (BRF) which was attended by 29 heads of state and governments including ousted Pakistan Prime Minister &nbsp;Nawaz Sharif, Lankan PM Ranil Wickremasinghe, besides official delegations from other South Asian countries.

India skipped the event with no Indian delegation sent for the opening ceremony addressed by Chinese President, Xi Jinping. India feels the OBOR project infringes upon its sovereignty and territorial integrity.

In late last year, <a href="http://www.wionews.com/south-asia/chinas-multi-billion-cpec-project-under-threat-in-pakistan-32466">Pakistan&#39;s minister for planning </a>and development Ahsan Iqbal had said government was examining a proposal to replace the US dollar with the Chinese yuan for trade between China and Pakistan after reports emerged that China had &quot;temporarily&quot; stopped funding of some projects in Pakistan under the China-Pakistan Economic Corridor (CPEC) over &quot;corruption&quot; issues.

The official motion 'recommends' Chinese language courses for Pakistan's CPEC human resource

According to fresh reports, Pakistan Senate's motion to declare Chinese as an official language was misreported. The official motion "recommends" Chinese language courses for Pakistan's CPEC human resource in the wake of "growing collaboration" between the two countries. "This House recommends that in view of the growing collaboration between Pakistan and China under the CPEC, courses of the Official Chinese Language should be launched for all current and prospective Pakistani CPEC human resource in order to overcome any costly communication barriers," reads the official motion. Chinese has not been made official language of Pakistan. It was misleading report by a few media outlets. Here is the actual resolution tabled in Senate pic.twitter.com/SzwZ6nQWqe — Adeel Raja (@adeelraja) February 20, 2018 × China has invested heavily in the CPEC project linking Pakistan's Gwadar port with China's western Xinjiang region. Last year, China and Pakistan had laid the framework for the One Belt, One Road(OBOR) initiative also known as the "Silk Road Economic Belt" and had signed several agreements worth over $50 billion which included developing the Gwadar port and airport in Balochistan province, upgrading the main railway track between Karachi and Peshawar in order to further trade. The two countries have also signed an MoU for the establishment of a dry port in Havelian. Last year, China had hosted a high-profile event in Beijing called the Belt and Road Forum (BRF) which was attended by 29 heads of state and governments including ousted Pakistan Prime Minister Nawaz Sharif, Lankan PM Ranil Wickremasinghe, besides official delegations from other South Asian countries. India skipped the event with no Indian delegation sent for the opening ceremony addressed by Chinese President, Xi Jinping. India feels the OBOR project infringes upon its sovereignty and territorial integrity. In late last year, Pakistan's minister for planning and development Ahsan Iqbal had said government was examining a proposal to replace the US dollar with the Chinese yuan for trade between China and Pakistan after reports emerged that China had "temporarily" stopped funding of some projects in Pakistan under the China-Pakistan Economic Corridor (CPEC) over "corruption" issues.

Pakistan Senate's motion 'misreported'; 'recommends' Chinese language courses for human resource

The State Bank of Pakistan has recently put Chinese Yuan as its main currency for trade within or outside Pakistan. They have put a framework within which all the investment transactions, Letter of Credits and other financial instruments can be dealt in Chinese Yuan. This was not unexpected.&nbsp;

&nbsp;

In the current scenario of strained relations with the United States and an extremely low forex reserve, Pakistan had to find an immediate alternative. It may be a temporary relief from the crisis but ultimately selecting Chinese Yuan is going to be a suicidal step for Pakistan&#39;s economy.&nbsp;

&nbsp;

These are not just the assumptions and based on strong facts and figures. Currently, Pakistan is importing good worth US$ 48-50 billion annually out of which a sizeable 30% comes from China through the China Pakistan Economic Corridor (CPEC). Whereas about 5% each comes from Indonesia, US and Japan and about 15% comes from UAE in the form of oil-related products.

&nbsp;

When it comes to the inflow of American dollars, Pakistan received about 45% of its 20 billion dollar export reimbursements in the form of US currency. Till date, the top consumer of Pakistani goods is the United States, which imports more than double the amount China does from Pakistan. So, if we mathematically assume the inflow and outflow of US dollars, Pakistan is expected to have an annual deficit of about 5-7 billion US dollars which is going to affect its economy.

&nbsp;

The second aspect is the stability of Chinese Yuan. Over last 20 years, the Yuan had been on a fall against the US dollars. The Chinese currency which was touching a figure of 8.74 in 1994 is now hovering around 6.5 per US dollars which is more than a 25% fall. This is likely to fall further because, in the current scenario of dwindling China exports, the Yuan is unlikely to recover and will continue to fall.&nbsp;

&nbsp;

The third aspect is the acceptability of Chinese Yuan as a global currency. Though the IMF has already accepted Yuan as a global currency in November 2015, yet it is still the fourth most used currency in the world after US dollar, Euro and Japanese Yen. The People&rsquo;s Bank of China has been making efforts to stabilise the currency but still, it is likely to reduce China&rsquo;s competitive advantage as a leading exporter.&nbsp;

&nbsp;

As such most American and European companies are looking for alternative manufacturing locations, such as in India and South-East Asia for their products, the adverse impact will be directly on the exports of China.

&nbsp;

The fourth and most important aspect is the faith in US dollar since it is a stable currency and is growing constantly. The strength of US economy instils trust in the investors and trading countries.&nbsp;

&nbsp;

In the near future, Pakistan&#39;s forex reserves shall be constituted mostly by Chinese Yuan and there will be a deficiency of other global currencies like US dollar, Euro and Japanese Yen. Pakistan, which is still struggling to pay its dues with their depleting reserves, is likely to go further bankrupt and will not have any option except to devalue its currency. The Pakistani Rupee which is currently at 112 Rupee per US dollar is likely to go below 150 in the next two years. This will negatively impact its economy and devalue its export reimbursements.

&nbsp;

After the completion of CPEC, Pak has to repay its loans to China. As per the current agreement, the repayment has to be in Chinese Yuan. In order to pay China in Yuan, Pakistan has to increase its export to China at terms and conditions put by cunning Chinese traders. While China will use the Pakistani land to establish its manufacturing hub and export the goods through Gwadar, Pakistan is not going to get anything except employment to few thousands of its people as workers in these factories.&nbsp;

&nbsp;

The Chinese plans to enhance its imports in the country rapidly. It is already considering Pakistan as one of its main markets. The Dragon is going to sell everything to Pakistan. From goods to services and electricity made in its power plants, using Pakistani resources. It will also put an economic burden on our neighbour in the form of increasing loans and interest payoffs.

&nbsp;

This move is directly targeted to make Pakistan as an alternative territory to China and shift its manufacturing pivot to an alternative location. While this seems to be a calculative move by China to become closer to Europe, Middle East and Central Asian markets, this is suicidal for Pakistan.&nbsp;

&nbsp;

(Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL).

&nbsp;

Top consumer of Pakistani goods is the United States, which imports more than double the amount China does from Pakistan. If we calculate the inflow and outflow of US dollars, Pakistan is expected to have an annual deficit of about 5-7 billion US dollars.

The State Bank of Pakistan has recently put Chinese Yuan as its main currency for trade within or outside Pakistan. They have put a framework within which all the investment transactions, Letter of Credits and other financial instruments can be dealt in Chinese Yuan. This was not unexpected. In the current scenario of strained relations with the United States and an extremely low forex reserve, Pakistan had to find an immediate alternative. It may be a temporary relief from the crisis but ultimately selecting Chinese Yuan is going to be a suicidal step for Pakistan's economy. These are not just the assumptions and based on strong facts and figures. Currently, Pakistan is importing good worth US$ 48-50 billion annually out of which a sizeable 30% comes from China through the China Pakistan Economic Corridor (CPEC). Whereas about 5% each comes from Indonesia, US and Japan and about 15% comes from UAE in the form of oil-related products. When it comes to the inflow of American dollars, Pakistan received about 45% of its 20 billion dollar export reimbursements in the form of US currency. Till date, the top consumer of Pakistani goods is the United States, which imports more than double the amount China does from Pakistan. So, if we mathematically assume the inflow and outflow of US dollars, Pakistan is expected to have an annual deficit of about 5-7 billion US dollars which is going to affect its economy. The second aspect is the stability of Chinese Yuan. Over last 20 years, the Yuan had been on a fall against the US dollars. The Chinese currency which was touching a figure of 8.74 in 1994 is now hovering around 6.5 per US dollars which is more than a 25% fall. This is likely to fall further because, in the current scenario of dwindling China exports, the Yuan is unlikely to recover and will continue to fall. The third aspect is the acceptability of Chinese Yuan as a global currency. Though the IMF has already accepted Yuan as a global currency in November 2015, yet it is still the fourth most used currency in the world after US dollar, Euro and Japanese Yen. The People’s Bank of China has been making efforts to stabilise the currency but still, it is likely to reduce China’s competitive advantage as a leading exporter. As such most American and European companies are looking for alternative manufacturing locations, such as in India and South-East Asia for their products, the adverse impact will be directly on the exports of China. The fourth and most important aspect is the faith in US dollar since it is a stable currency and is growing constantly. The strength of US economy instils trust in the investors and trading countries. In the near future, Pakistan's forex reserves shall be constituted mostly by Chinese Yuan and there will be a deficiency of other global currencies like US dollar, Euro and Japanese Yen. Pakistan, which is still struggling to pay its dues with their depleting reserves, is likely to go further bankrupt and will not have any option except to devalue its currency. The Pakistani Rupee which is currently at 112 Rupee per US dollar is likely to go below 150 in the next two years. This will negatively impact its economy and devalue its export reimbursements. After the completion of CPEC, Pak has to repay its loans to China. As per the current agreement, the repayment has to be in Chinese Yuan. In order to pay China in Yuan, Pakistan has to increase its export to China at terms and conditions put by cunning Chinese traders. While China will use the Pakistani land to establish its manufacturing hub and export the goods through Gwadar, Pakistan is not going to get anything except employment to few thousands of its people as workers in these factories. The Chinese plans to enhance its imports in the country rapidly. It is already considering Pakistan as one of its main markets. The Dragon is going to sell everything to Pakistan. From goods to services and electricity made in its power plants, using Pakistani resources. It will also put an economic burden on our neighbour in the form of increasing loans and interest payoffs. This move is directly targeted to make Pakistan as an alternative territory to China and shift its manufacturing pivot to an alternative location. While this seems to be a calculative move by China to become closer to Europe, Middle East and Central Asian markets, this is suicidal for Pakistan. (Disclaimer: The opinions expressed above are the personal views of the author and do not reflect the views of ZMCL).

Opinion: Pakistan makes a suicidal move. Chinese Yuan its main trade currency

Traders said central banks of India and Korea sold dollars to curb fall of their currencies

At least two Asian central banks were suspected of intervening in their currency markets on Friday, according to traders, as global financial markets went into a tailspin after Britain voted to leave the European Union in a historic vote. Multiple traders said the Bank of Korea was thought to have sold dollars to curb the won's fall as the local currency dropped, while the Reserve Bank of India likely sold dollars through state-owned banks to prevent the rupee from falling further. An official at the Bank of Korea declined to comment, but South Korea's Vice Finance Minister Choi Sang-Mok said the government will make all efforts to minimize the impact from Brexit. "Regarding foreign exchange trade, we will use all usable options to stabilize markets, including launching smoothing operations,” he said. A senior policymaker aware of the Reserve Bank of India's plans for Brexit-related market management said that the central bank is "prepared to deal with any volatility." Separately, Japan's finance minister Taro Aso said he is carefully monitoring market developments and will respond as and when needed in the currency markets. A statement from the G7 group of leading industrial economies was expected on Friday. The question will be whether there is any coordinated intervention to ease monetary policy by global central banks, though room for maneuver is modest. "The ECB has few additional options left, yet it could announce more targeted purchases of peripheral sovereign bonds in the case investors start betting against the euro again,” said Markus Schomer, chief economist at Pinebridge Investments. The yen surging to its strongest levels against the dollar in two-and-a-half years, briefly breaking through the 100-yen-to-the-dollar level. Sterling suffered its biggest one-day fall of more than 9 percent against the dollar, hitting its lowest level in three decades. Japanese stocks sank, pushing the Nikkei 225 index down more than 8 percent to its lowest since October 2014, and a similar decline in the Nikkei futures triggered circuit breakers. Money markets were volatile. Fed fund futures effectively moved to pricing in a tiny U.S. rate cut from a rate increase in July. Japan's Deputy Chief Cabinet Secretary Hiroshige Seko told reporters the government was worried about market moves, saying sudden shifts because of the British vote were undesirable. The yen's strength due to its safe-haven status has been a frustration for Japanese authorities, who want a weaker currency to support exports and the economy. But they have been unable to garner support for intervention to weaken it from other major economies, most notably the United States. The 100-yen-per-dollar level has been seen as a pivotal point to test the patience of Japan's monetary officials on intervention. Morgan Stanley expects the dollar to fall to 90 yen as investors seek the Japanese currency out as a relative safe haven, and a further 15-20 percent downside for European equities from current levels. The Australian dollar, often sold off in times of heightened market stress, fell heavily against the dollar and the yen. Traditional stress markers such as interbank dollar funding rates in Singapore and Hong Kong were broadly steady, but treasury bill and front end government bond yields fell. "Because of this matter, we have made preparation in many aspects. We have reserved sufficient liquidity and we are able to handle in different situations," Hong Kong Financial Secretary John Tsang told reporters in the airport on Friday morning before he flew out to Beijing. The Hong Kong Monetary Authority has asked banks to maintain ample cash conditions with them. No unscheduled monetary liquidity injection operations have been taken so far, according to an HKMA spokeswoman. The Singapore stock exchange played its part in trying to reduce volatility by raising margins on Nikkei futures traded on its exchange. The People's Bank of China injected 170 billion yuan ($25.9 billion) on Friday, taking the net injection for the week to 340 billion yuan, the biggest in two months. But that was seen more about averting a cash squeeze at the end of the half year next week, as has happened previously, rather than responding to the Brexit vote. Still, the yuan fell to its weakest level against the U.S. dollar since January 2011 while its offshore counterpart slipped to its weakest level in more than four months. The Philippines' central bank said on Friday it was closely monitoring the foreign exchange market and remains prepared to act to ensure orderly transactions and smooth volatility. (Reuters)

Asian central banks, policymakers wade in to calm markets after Brexit vote

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