4 ms·
What is not clear is this: 1. Who is selling the CNY for USD? Specifically is it another arm of the government? 2. More importantly: what is the new holder
by jhulla 11y ago
What is not clear is this:
1. Who is selling the CNY for USD? Specifically is it another arm of the government?
2. More importantly: what is the new holder USD allowed to do with their newly acquired USD cash pile? Are they allowed to transfer it out of the country? Or are they required to keep it in USD, but it in Chinese banks? Are their restrictions on what they can buy?
- chii 11y ago> Who is selling the CNY for USD? i m guessing currency traders, who sees a good deal selling their CNY for USD for more than they purchased the CNY prior.
- URSpider94 11y agoThe CNY are coming from the open market, people who have yuan and want to have dollars. Since it's the open market, they can do whatever they want with those dollars after the trade. Thus, this is putting more dollars into circulation.
- leereeves 11y agoI assume China is making these trades in the foreign exchange market. (Which is like a stock market for trading currencies.) https://en.wikipedia.org/wiki/Foreign_exchange_market https://en.wikipedia.org/wiki/Foreign_exchange_market If so, anyone could be on the other side of the trade, including other governments, banks, speculators, investors, and businesses. The USD are transferred to the other party, out of China if appropriate.