Business

South Korea, Japan vow ‘appropriate action’ on weak won and yen

Published

4 weeks ago

April 17, 2024

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South Korea, Japan vow 'appropriate action' on weak won and yen

South Korea and Japan shared “serious concerns” on the recent weakness of their currencies against the dollar and agreed to take “appropriate actions” to counter extreme volatility, the finance ministry in Seoul said Wednesday.

The foreign exchange market has witnessed a surge in volatility following Iran’s weekend drone and missile assault on Israel, in retaliation for what Tehran said was an Israeli strike on its embassy in Syria.

Seoul issued a rare warning on Tuesday, saying authorities were carefully monitoring currency movements as the won briefly touched a critical level of 1,400 per dollar for the first time in 17 months.

The yen has fallen to a 34-year low against the dollar as a string of above-forecast US inflation and jobs data sees investors re-evaluate their outlook for when the Federal Reserve will cut interest rates, while the Bank of Japan keeps monetary policy loose.

Read more: Dollar rally supercharged by US rate outlook, could complicate inflation fight for other economies

South Korean Finance Minister Choi Sang-mok and his Japanese counterpart Shunichi Suzuki discussed the matter in Washington this week on the sidelines of a G20 meeting, according to the finance ministry.

The two “shared serious concerns about the recent significant depreciation of the Japanese yen and the Korean won”, it said in a statement.

They also “expressed their intention to take appropriate actions against excessive movements”, it added.

Speculation was swirling that the dollar will strengthen further after Fed boss Jerome Powell suggested US interest rates could be held at two-decade highs for longer than expected as the bank struggles to get inflation down to its 2 per cent target.

The greenback has also risen against a range of other currencies this year, including the Indian rupee, Australian dollar and Thai baht.

The Japanese finance ministry’s top currency diplomat recently hinted that intervention in markets to support the yen could be an option.

Tokyo last intervened in forex markets in October 2022, when it spent 6.3 trillion yen ($40 billion today) to support its currency.

A weaker currency is often regarded as beneficial for a country’s export competitiveness and enhancing exporter profits. But a swift decline in value triggers worries over capital outflows and instability in financial markets.

The won has weakened more than 7 per cent against the dollar this year and the yen nearly 9 per cent, according to Bloomberg News.

“Foreign exchange authorities are closely watching exchange rate movements, foreign exchange supply and demand with special vigilance,” officials from the finance ministry and the Bank of Korea, said in a statement Tuesday.

“Excessive herd behaviour is not desirable for our economy.”

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Business

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Published

3 hours ago

May 17, 2024

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Business

Govt jacks up power price by Rs1.47 per unit

Published

3 hours ago

May 17, 2024

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Business

Hong Kong allows China’s digital yuan to be used in local shops

Published

3 hours ago

May 17, 2024

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

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