Asian Currencies Slip on Trade Fears as Authorities Try to Avert Crisis

Many of Asia’s currencies are losing value against the U.S. dollar this year as China and the United States fight over trade, but analysts say policymakers are handling the dip better now than during past down cycles.

China, India, Indonesia and Myanmar, to name just a few, have seen their currencies lose value since the start of 2018. The Indian rupee hit an all-time low in June, and the Chinese yuan lost 3.2 percent over the year through June.

Economists point to a range of problems, including possible contagion from financial woes in Turkey and concerns about investing in Asia due to the Sino-U.S. trade war expected to hit China next week with tariffs on goods worth $16 billion.

“It’s just basically that everything we’ve worried about now and then sort of converged together,” said Song Seng Wun, an economist in the private banking unit of CIMB in Singapore.

But monetary authorities in Asia have learned from currency dips in 2013, 2015 and 2016, economists believe.

​Causes for decline

No single cause is pushing currency prices lower around Asia, analysts say. Rising oil prices have knocked back the rupee as Indians pay more to import it, media in the country say. Domestic media in Myanmar blame a surge in imports into the fast-growing Southeast Asian country, plus people’s hoarding of U.S. dollars.

In Vietnam, the brokerage Bao Viet Securities blames a 1.3 percent dip in the dong currency due to pressure from similar slips elsewhere in Asia, including the Chinese yuan’s devaluation and a 7 percent fall in the Indonesian rupiah as of June.

A particularly severe fall in Turkey’s lira along with inflation and loan defaults — all threatening to drag down other economies — is weighing on Asian currency rates, Song said.

Economists and media in the countries affected usually point to spillover from the Sino-U.S. import-export war as a chief cause. That dispute began unfolding in early 2018 as U.S. President Donald Trump said Beijing was trading unfairly.

In India, the trade war has dissuaded investors from taking positions in domestic assets, media reports there say. And in Vietnam, China’s devaluing of the yuan in June, possibly because of U.S. trade tension, cramps Vietnamese exports. A lower yuan helps Chinese exporters earn more on goods shipped to the United States.

“I think there’s a number of reasons why it could be going down,” said Maxfield Brown, speaking to the currency in Vietnam where he’s senior associate with the business consultancy Dezan Shira & Associates.

“I think [Vietnamese officials] are watching what’s going on between China and the United States, and it is a fact that the Chinese government has devalued its currency and that impacts the ability of Vietnam to export products. I think everyone’s watching the situation.”

​Coping strategies

Asian monetary authorities have gotten a grip on this year’s devaluations compared to what happened in 2013 as capital left Asia due to the tapering of economic stimulus in the United States, said Marie Diron, managing director with Moody’s Investors Service in Singapore.

Economic stimulus after the global financial crisis had inspired investors to buy assets in Asia where they grew relatively fast, tracking the region’s economic strength.

To shore up the rupiah, Indonesia’s monetary authority has raised interest rates four times in three months. Monetary authorities in India and the Philippines have raised rates this year, as well. Rate hikes generally raise the value of currencies compared to countries that keep rates down.

Asian countries are keeping more foreign currency in reserve and better controlling any budget deficits, as well, Diron said.

“Central banks have built up their foreign exchange reserve buffer, so they do have more ammunition, if you want, to at least smooth some of the currency volatility,” she said.

In Vietnam, mismanagement of currency in the past has taught leaders how to react, and they’re aiming for a “measured response” now, Brown said.

China is likely to nudge its currency back up along with budgetary stimulus for the economy, easing worries in other markets, the French investment bank Natixis said in a research note Friday.

Asian currency drops are unlikely to reach crisis levels, economists say. They’re not weak enough even to pose that threat yet, Song said.

In some cases, he said, trade-reliant nations such as many in Southeast Asia may fare better with weaker currencies because exporters would earn more money when converting their U.S. dollar earnings into local units.

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НБУ понизив курс гривні до долара на 22 копійки

Національний банк України суттєво понизив офіційний курс гривні. Згідно зі встановленим на 20 серпня курсом, падіння складає 22 копійки.

Якщо сьогодні за американський долар була встановлена ціна 27 гривень 67 копійок, то на понеділок – 27,89.

Раніше сьогодні регулятор повідомляв, що продав банкам на валютному аукціоні майже 25 мільйонів доларів.

У НБУ пояснили, що зберігають активну присутність на міжбанківському валютному ринку для згладжування надмірних коливань обмінного курсу гривні, «які посилилися поточного тижня у зв’язку із подальшим перевищенням попиту на валюту над її пропозицією».

Читайте також: Нацбанк про приїзд місії МВФ: це матиме позитивний вплив на стан валютного ринку

«Дається взнаки сезонне збільшення попиту з боку імпортерів енергоресурсів, які потребують валюту для розрахунків за газ і за нафтопродукти (для раннього початку збирання врожаю) і з боку імпортерів товарів і послуг споживчого спрямування (електроніка, харчові продукти, туризм тощо), що є наслідком зростання доходів населення. Крім того, під впливом негативних очікувань вже традиційно напередодні осені зменшується пропозиція валюти з боку населення на готівковому ринку, що позначається на спрямованості операцій банків на міжбанківському валютному ринку», – заявляють у Нацбанку.

Про вихід на міжбанківський ринок із продажем валюти Національний банк України оголосив 2 серпня. У банку заявляли, що зробили це для стримування зростання курсу долара. Саме 2 серпня курс гривні до долара вперше з 27 лютого досяг позначки у 27 гривень за долар.

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Google Workers Protest China Plan Secrecy

Google is planning a return to China.

But the project is shrouded in secrecy, and employees are demanding transparency.

According to a report by The New York Times on Thursday, August 16, a petition calling for more oversight and accountability in the project racked up more than 1,000 signatures.

Reuters reported this month, the app is a bid to win approval from Beijing to provide a mobile search engine in China.

However, employees are concerned the app would support China’s restrictions on free expression and ultimately violate the company’s ‘don’t be evil’ code of conduct.

The petition, seen by Reuters says, “We urgently need more transparency, a seat at the table and a commitment to clear and open processes: Google employees need to know what we’re building.”

The company declined to comment.

Sources say the project – codenamed Dragonfly – would block certain websites and search terms.

It would also stand in stark contrast to eight years ago, when Google left China in protest of Beijing’s censorship.

Company executives have not commented publicly on Dragonfly.

But in a transcript seen by Reuters, Google’s Chief Executive Sundar Pichai told employees “it’s all very unclear” whether Google would return to China at all.

He also said that development is still in the early stages, and that sharing information too early could quote “cause issues”.

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Can Twitter Change Its ‘Core’ and Remain Twitter?

After long resisting change, Twitter CEO Jack Dorsey wants to revamp the “core” of the service to fight rampant abuse and misinformation. But it’s not clear if changing that essence — how it rewards interactions and values popularity — would even work.

 

Though Dorsey was scant on details, what is certain is that the move will require huge investments for a company that doesn’t have the same resources that Google and Facebook have to throw at the problem. Any change is likely to affect how users engage with Twitter and hurt revenue, testing the patience of both users and investors.

 

“Social networks have a history of … well-intentioned but badly designed efforts to fix this,” said Nate Elliott, principal at marketing research firm Nineteen Insights.

 

Twitter isn’t alone in having to deal with hate, abuse, misinformation and bad actors using the service for elections interference, targeted harassment and scams. And Twitter isn’t alone in proposing fixes that don’t get to the heart of the problems.

 

Case in point: Facebook. After Russian trolls were found to have used Facebook to interfere with the 2016 U.S. elections, including by purchasing ads, the company spent a lot of time and energy building a tool that shows who’s behind political advertisements. But Elliott said it’s not even clear which ads on Facebook are the ones causing problems around foreign elections meddling. In 2016, Russian agents weren’t so much running political ads for or against candidates but rather social ads on divisive such as gun control and immigration.

 

But like Facebook, Twitter has to try — or at least be seen as trying.

 

Dorsey told The Washington Post that Twitter had not considered changing the core of the service until now. Like Facebook and others, Twitter has been accused of tinkering around the edges, tweaking policies and hiring masses of moderators when what’s really needed is a fundamental shift in how they work and how they make money in order to survive. While many former executives and other insiders have proposed radical shifts at major social networks, it’s rare for a sitting CEO to propose something as drastic as revisiting the foundation that his company is built on.

 

“We often turn to policy to fix a lot of these issues, but I think that is only treating surface-level symptoms that we are seeing,” Dorsey said.

 

Twitter confirmed Dorsey’s comments to the Post, but declined further comment.

 

Revamping the core could mean changing the engagement and rewards designed to keep users coming back — in the form of seeing their tweets liked, responded to and retweeted, and seeing their follower counts grow. It’s the tiny dopamine hits we get with each like that makes us feel better and keeps us returning for more. Take that away, and users might not want to return. In turn, advertisers might stay away, too, as they rely on monthly and daily user numbers, as well as user interactions, to gauge how well their ads work and how much to spend.

 

Unlike Facebook, Elliott said, Twitter doesn’t have billions of users to absorb any hits on user growth. Even if the changes work, he said, “it’s going to cost them so many users and so much money I can’t imagine them sticking with these kinds of changes.”

 

Paul Verna, an analyst with research firm eMarketer, also isn’t “terribly optimistic” that Twitter can make its service safer without hurting its business. The same goes for Facebook, and YouTube.

 

“Because they rely on an advertising business model, they need to not only continue to reach audiences, but try to get them to spend as much time on platforms as possible,” he said. “That creates an inherent tension between your business needs and being a good citizen.”

 

That said, Twitter may not have to reinvent itself completely to improve. Elliott said better policies might go a long way toward reducing the abuse. For example, it’s currently OK to harass someone on Twitter, as long as it’s not harassment based on certain categories such as gender and sexual orientation. Elliott said Twitter may just need to prohibit all harassment.

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Little Leaguers Connect With Translate, Fortnite, Facebook

Outfielder Rolando Rodriguez from Panama heard a reporter’s question, but he doesn’t speak English. So Georgia shortstop Tai Peete helped him out, pecking the words into Google Translate to ask about how young baseball players are sharing technology during the Little League World Series.

“It was easier than expected,” Rodriguez said of the language barrier, speaking through an interpreter.

So goes life in the International Grove, the dorms where 16 teams all are staying during the double-elimination tournament in pursuit of a world title. Apps and even video games are making it easier for the boys to communicate and get to know each other — making smartphones a key part rather than a distraction during their moment of a lifetime.

Eight teams are from U.S. states while the other teams represent various countries around the world and the U.S. territory of Puerto Rico.  Players are using Translate to input questions in their native languages and let other players read or hear them in one of more than 100 languages.

Trading pins

That’s changing some of the tournament’s traditions. For example, each team has pins that they are given to trade with other teams. While body language used to go a long way in this process, players are using technology to directly ask for trades.

No words actually need to be spoken aloud, but the kids still are helping fellow baseball players pronounce the words, learning a little bit of a new language in the process.

“I talked to the Mexico team,” Peete said. “I was talking about Little League and they couldn’t pronounce it, so I was helping them.”

Even with better technology, language and cultural barriers still exist.

It’s “a lot harder than I thought,” said Lee Jae-hyeok of South Korea, who noted through a human interpreter that players also were using Facebook to connect.

The days leading up to the start of the series on Thursday consisted of practices, interviews and hanging out in the players village. For the duration of the tournament, each team from the U.S. bracket shares a dorm with one of the international teams. The rooms have bunk beds and TVs, but no Wi-Fi.

They do have a game room, however, which allows players to get their video game fix in a more social way.

Arcade games, table tennis

The space has arcade games, including bowling and motorcycle simulators, but also activities like table tennis. Peete taught the tailgate favorite cornhole to the Australian club.

One common thread for most of the boys: Fortnite, the massively popular, multiplayer shootout video game. They don’t have their consoles but they can still play on their phones and try to impress each other with renditions of the famous dances done by the game’s characters.

But the reason for their visit to Pennsylvania loomed.

“Can we play a [baseball] game?” Peete asked a volunteer at the Little League complex before the tournament started, suggesting that maybe the whole World Series could be moved up.

“There’s nothing else to do,” he said.

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US Charges 22 Chinese Importers with Smuggling Counterfeit Goods into US

A federal court in New York has charged 22 Chinese importers with smuggling nearly half-a-billion dollars in counterfeit goods into the United States from China.

The fake products include such popular luxury items as Louis Vuitton bags, Michael Kors wallets, and Chanel perfume.

Twenty-one of the defendants were arrested Thursday.

U.S. attorneys say the suspects allegedly smuggled the China-made counterfeit goods in large shipping containers disguised as legitimate products and brought them into ports in New York and New Jersey.

The defendants apparently intended to sell the fake products across the United States with a street value of nearly $500 million.

Along with smuggling and trafficking in counterfeit goods, the suspects are also charged with money laundering and immigration fraud.

“The illegal smuggling of counterfeit goods poses a real threat to honest business,” assistant attorney general Brian Benczkowski said. “The Department of Justice is committed to holding accountable those who seek to exploit our borders by smuggling counterfeit goods for sale on the black market.”

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Russia Calls Latest US Sanctions on Companies in Russia, China, and Singapore ‘Useless’

Russia says the latest U.S. sanctions imposed on Russian, Chinese, and Singaporean companies are “destructive” and “useless.”  

The U.S. penalized the three companies Wednesday, accusing them of helping North Korea avoid international sanctions.

The Russian Foreign Ministry said Thursday the new U.S. sanctions come when “joint international efforts” are needed toward a settlement in North Korea. Moscow said the sanctions could undermine denuclearization talks.

The U.S. has accused a Chinese trading company and its affiliate in Singapore of falsifying documents aimed at easing illegal shipments of alcohol and cigarettes into North Korea. The companies are said to have earned more than $1 billion.

A Russian company was also sanctioned for providing port services to North Korean-flagged ships engaged in illegal oil shipments.

The sanctions freeze any assets the companies may have in the United States and bars Americans from doing business with them.

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