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China's About to Sell Dollar Bonds in Middle of a Trade War
| October 9, 2018, 11:01 AM CDT Updated on October 10, 2018, 2:09 AM CDT
| Carrie Hong and Lianting Tu
Posted on 10/11/2018 2:03:29 AM PDT by Zhang Fei
Bloomberg link only
TOPICS: Business/Economy; Extended News; Foreign Affairs; News/Current Events
KEYWORDS: china; maga; trump
This, and $700b in dollar-denominated debt owed by Chinese corporations, is why China is unlikely to let the yuan depreciate much. Borrowing in dollars means paying low interest rates. But it also means taking on currency risk - if the dollar appreciates against the local currency, making interest payments becomes increasingly burdensome, since the company's local profits buy fewer dollars.
posted on 10/11/2018 2:03:29 AM PDT
by Zhang Fei
To: Zhang Fei
It will just put downward pressure on Treasury bonds, all without the Fed doing anything.
Another Pres. Trump win!
posted on 10/11/2018 6:29:12 AM PDT
("...that all the donkeys were dead. I know nothing as to the fate of the less valuable animals.")
posted on 10/11/2018 6:39:08 AM PDT
( I hope Associate Justice Kavanaugh is one vindictive SOB.)
This may be true, but the Fed will screw things up by raising the rates.
posted on 10/11/2018 7:17:31 AM PDT
(Father of a Marine, Uncle of SGT Adam Estep. A Co. 2/5 Cav. KIA Thurs April 29, 2004 Baghdad Iraq)
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