Arab Today, arab today china weighs tax on currency trades
Last Updated : GMT 10:05:59
Arab Today, arab today
Arab Today, arab today

China 'weighs tax on currency trades'

Arab Today, arab today

Arab Today, arab today China 'weighs tax on currency trades'

China's foreign-exchange reserves dropped to $3.20 trillion at the end of February 2016
Beijing - AFP

China's central bank has drafted plans to impose a tax on currency trades, Bloomberg News reported Tuesday, in what would be its latest volley against those betting on a depreciation of the yuan.

Chinese authorities have spent unprecedented sums to support the currency and stem capital flight since a surprise devaluation rattled investors last summer.

The tax would be the most dramatic measure to date, although Bloomberg reported that the rules had yet to be approved and the level might initially be kept at zero as an experiment.

Dubbed a "Tobin tax" after Nobel economics prizewinner James Tobin, it would impose a small levy on foreign-exchange transactions. The aim would be to deter investors from seeking to profit on fluctuations in the currency.

Analysts said the move would reduce liquidity in the long term and possibly fuel short-term volatility as investors were forced to leave the market.

If implemented, the tax could also raise questions about plans for the yuan to join the International Monetary Fund's elite reserve currency basket, scheduled for October.

"RMB as reserve currency RIP," George Magnus, associate at the University of Oxford China Centre, wrote on Twitter. "Not that it was likely anyway."

"Tobin taxes" have been fiercely debated since they were first proposed, with Sweden adopting a financial transaction tax in the 1980s to boost government revenue, and then abolishing it after bond trading volumes collapsed.

Major banking hubs such as Britain and the US have previously opposed them for the damage they would cause the financial sector.

The idea of a Chinese Tobin tax was floated last year by the deputy chief of the central People's Bank of China in an article for China Finance magazine, in which he said it would help "contain the inflows and outflows of short-term speculative and arbitrage funds".

Chris Weston, chief market strategist at IG, said there was speculation that the central bank "is taking the fight to the speculative FX community", but that the Tobin tax would "not be taken kindly by the IMF" if adopted.

"If Chinese officials broaden this to other markets, like swaps, then speculators may pile into proxy currencies" such as the Hong Kong dollar, he added.

China's foreign-exchange reserves dropped to $3.20 trillion at the end of February, the People's Bank of China reported last week -- down more than $300 billion in just four months.

 

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today china weighs tax on currency trades Arab Today, arab today china weighs tax on currency trades

 



Arab Today, arab today
Arab Today, arab today Jordan airline suggests flyers 'talk'

GMT 11:59 2017 Friday ,24 March

Jordan airline suggests flyers 'talk'
Arab Today, arab today 5 Crafty Must-Have Limited-Budget Ideas

GMT 17:03 2017 Saturday ,25 March

5 Crafty Must-Have Limited-Budget Ideas
Arab Today, arab today Rebel supporters flood Yemen streets

GMT 06:39 2017 Monday ,27 March

Rebel supporters flood Yemen streets
Arab Today, arab today Media host gives priority to problems of people

GMT 07:00 2017 Tuesday ,28 March

Media host gives priority to problems of people
View News in Arabic - Business: اقتصاد دولي
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Yemen children dream of school

GMT 07:25 2017 Friday ,24 March

Yemen children dream of school
Arab Today, arab today Trump poised to roll back climate protections

GMT 09:28 2017 Tuesday ,28 March

Trump poised to roll back climate protections
Arab Today, arab today Prepares to give stargazers an eyeful

GMT 13:38 2017 Monday ,06 March

Prepares to give stargazers an eyeful
Arab Today, arab today Uber grounds self-driving cars

GMT 09:11 2017 Monday ,27 March

Uber grounds self-driving cars
Arab Today, arab today Audi RS 5 Coupe acquires new design

GMT 13:22 2017 Thursday ,23 March

Audi RS 5 Coupe acquires new design
Arab Today, arab today Trump to roll back Obama clean power plan

GMT 11:10 2017 Monday ,27 March

Trump to roll back Obama clean power plan

GMT 09:58 2017 Saturday ,25 March

Nermein Al Fekki films “Foxes in the Valley”

GMT 06:21 2017 Friday ,24 March

MP submits a petition to dismiss university head

GMT 18:57 2017 Tuesday ,21 March

Accessories designer reveals her new collection

GMT 04:51 2017 Friday ,24 March

Salvage of South Korea's Sewol ferry

GMT 13:26 2017 Friday ,24 February

Expresses Algerian history by woody figures

GMT 07:36 2017 Wednesday ,22 March

US, Britain ban laptops on flights

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons

GMT 06:04 2017 Tuesday ,28 March

Saudi Arabia ranks 3rd globally for smartphone use

GMT 19:27 2017 Saturday ,11 March

Boualsof launches "Priestess Kahina" collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday