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President Donald Trump pledged to make an expedited appeal of a ruling by a federal judge in California that blocks him from building sections of his long-sought border wall with money secured under his declaration of a national emergency.

Trump, who is visiting Japan, tweeted Saturday: “Another activist Obama appointed judge has just ruled against us on a section of the Southern Wall that is already under construction. This is a ruling against Border Security and in favor of crime, drugs and human trafficking. We are asking for an expedited appeal!”

U.S. District Judge Haywood Gilliam Jr. on Friday immediately halted the administration’s efforts to redirect military-designated funds to build sections of wall on the Mexican border. His order applies to two planned projects to add 51 miles of fence in two areas.

Gilliam issued the ruling after hearing arguments last week in two cases. California and 19 other states brought one lawsuit; the Sierra Club and a coalition of communities along the border brought the other.

At stake is billions of dollars that would allow Trump to make progress on a signature campaign promise heading into his campaign for a second term.

Source: NewsMax Politics

FILE PHOTO: Iran's Foreign Minister Mohammad Javad Zarif sits for an interview with Reuters in New York
FILE PHOTO: Iran’s Foreign Minister Mohammad Javad Zarif sits for an interview with Reuters in New York, New York, U.S. April 24, 2019. REUTERS/Carlo Allegri/File Photo

May 25, 2019

DUBAI (Reuters) – Iranian Foreign Minister Mohammad Javad Zarif said on Saturday that the U.S. decision to deploy more troops to the Middle East in response to the perceived threat from Iran was “extremely dangerous” for peace.

The United States said it was sending 1,500 troops to region in what it called an effort to bolster defenses against Tehran, and it accused Iran’s Revolutionary Guards of direct responsibility for attacks on tankers this month.

“The Americans have made such allegations to justify their hostile policies and to raise tensions in the Persian Gulf,” Zarif told state news agency IRNA.

“Increased U.S. presence in our region is extremely dangerous and it threatens international peace and security, and this should be addressed,” he said.

U.S. President Donald Trump also invoked the threat from Iran to declare a national security-related emergency that would clear the sale of billions of dollars’ worth of weapons to Saudi Arabia, the United Arab Emirates and other countries without congressional approval.

It follows decisions to speed up the deployment of an aircraft carrier strike group as well as to send bombers and additional Patriot missiles to the Middle East.

Separately, a Revolutionary Guards commander said the security of the Strait of Hormuz, an oil shipping route, was linked to Iran being able to export its oil, the semi-official news agency Fars reported.

“Major General Gholamali Rashid said that talking about security and stability in the Persian Gulf and the Strait of Hormuz is not possible without considering the interests of the Iranian nation, including the export of oil,” Fars said.

Iran has threatened to disrupt oil shipments through the Strait of Hormuz if the United States tries to strangle Tehran’s economy by halting its oil exports through increased sanctions.

Separately, an Iranian military official said Iran could sink U.S. warships in the Gulf, while another said it was unlikely for a war to start in the region.

“America…is sending two warships to the region. If they commit the slightest stupidity, we will send these ships to the bottom of the sea along with their crew and planes using two missiles or two new secret weapons,” General Morteza Qorbani, an adviser to Iran’s military command, told the Mizan news agency.

Western experts say Iran often exaggerates its weapons capabilities, although there are concerns about its missile program and particularly its long-range ballistic missiles.

“We believe rational Americans and their experienced commanders will not let their radical elements lead them into a situation from which it would be very difficult to get out, and that is why they will not enter a war,” Brigadier General Hassan Seifi, an assistant to Iran’s army chief, told Mehr news agency.

(Reporting by Dubai newsroom; Editing by Sam Holmes and Angus MacSwan)

Source: OANN

FILE PHOTO: Pakistani Prime Minister Imran Khan delivers a speech at the opening ceremony for the second Belt and Road Forum in Beijing
FILE PHOTO: Pakistani Prime Minister Imran Khan delivers a speech at the opening ceremony for the second Belt and Road Forum in Beijing, China, April 26, 2019. REUTERS/Florence Lo/File Photo

May 25, 2019

By Drazen Jorgic

ISLAMABAD (Reuters) – Pakistani Prime Minister Imran Khan warned against the risk of conflict in the region, following a visit to Islamabad by Iranian Foreign Minister Javad Zarif as tensions between Washington and Tehran escalated.

Strains have increased between Iran and the United States, which is a firm backer of Tehran’s regional rival Saudi Arabia, in the wake of this month’s attack on oil tankers in the Gulf region that Washington has blamed on Iran.

Tehran has distanced itself from the bombings, but the United States has sent a aircraft carrier and an extra 1,500 troops to the Gulf, sparking concerns about the risks of conflict in a volatile region.

Khan, who has been seeking to improve Pakistan’s strained relations with neighbor Iran, said he was concerned about the “rising tensions in the Gulf”, but did not specifically name the United States or Saudi Arabia.

“He underscored that war was not a solution to any problem,” Khan’s office said in a statement late on Friday, citing the premier.

“Further escalation in tensions in the already volatile region was not in anyone’s interest. All sides needed to exercise maximum restraint in the current situation.”

Washington has been seeking to increasingly tighten sanctions against Iran, as relations continue to worsen under President Donald Trump.

At the end of the two-day visit to Pakistan, Zarif told Iranian state-run newswire IRNA that U.S. allegations against Tehran were increasing tensions.

“These actions are also a threat to global peace and stability,” he said.

Earlier this month, four tankers, including two belonging to Saudi Arabia, were bombed near the United Arab Emirates’ Fujairah emirate, one of the world’s largest bunkering hubs, located just outside the Strait of Hormuz.

Washington has accused Iran’s Revolutionary Guards of carrying out the attacks, and the Trump administration has declared a national security-related emergency that would clear the sale of billions of dollars’ worth of weapons to Saudi Arabia, the United Arab Emirates and other countries, bypassing congressional approval.

Pakistan’s relations with Iran have also been strained in recent months, with both sides accusing each other of not doing enough to stamp out militants allegedly sheltering across the border.

(Reporting by Drazen Jorgic; Editing by Sam Holmes)

Source: OANN

FILE PHOTO: Pakistani Prime Minister Imran Khan delivers a speech at the opening ceremony for the second Belt and Road Forum in Beijing
FILE PHOTO: Pakistani Prime Minister Imran Khan delivers a speech at the opening ceremony for the second Belt and Road Forum in Beijing, China, April 26, 2019. REUTERS/Florence Lo/File Photo

May 25, 2019

By Drazen Jorgic

ISLAMABAD (Reuters) – Pakistani Prime Minister Imran Khan warned against the risk of conflict in the region, following a visit to Islamabad by Iranian Foreign Minister Javad Zarif as tensions between Washington and Tehran escalated.

Strains have increased between Iran and the United States, which is a firm backer of Tehran’s regional rival Saudi Arabia, in the wake of this month’s attack on oil tankers in the Gulf region that Washington has blamed on Iran.

Tehran has distanced itself from the bombings, but the United States has sent a aircraft carrier and an extra 1,500 troops to the Gulf, sparking concerns about the risks of conflict in a volatile region.

Khan, who has been seeking to improve Pakistan’s strained relations with neighbor Iran, said he was concerned about the “rising tensions in the Gulf”, but did not specifically name the United States or Saudi Arabia.

“He underscored that war was not a solution to any problem,” Khan’s office said in a statement late on Friday, citing the premier.

“Further escalation in tensions in the already volatile region was not in anyone’s interest. All sides needed to exercise maximum restraint in the current situation.”

Washington has been seeking to increasingly tighten sanctions against Iran, as relations continue to worsen under President Donald Trump.

At the end of the two-day visit to Pakistan, Zarif told Iranian state-run newswire IRNA that U.S. allegations against Tehran were increasing tensions.

“These actions are also a threat to global peace and stability,” he said.

Earlier this month, four tankers, including two belonging to Saudi Arabia, were bombed near the United Arab Emirates’ Fujairah emirate, one of the world’s largest bunkering hubs, located just outside the Strait of Hormuz.

Washington has accused Iran’s Revolutionary Guards of carrying out the attacks, and the Trump administration has declared a national security-related emergency that would clear the sale of billions of dollars’ worth of weapons to Saudi Arabia, the United Arab Emirates and other countries, bypassing congressional approval.

Pakistan’s relations with Iran have also been strained in recent months, with both sides accusing each other of not doing enough to stamp out militants allegedly sheltering across the border.

(Reporting by Drazen Jorgic; Editing by Sam Holmes)

Source: OANN

The Health and Human Services Department on Friday released a proposed regulation that in effect says “gender identity” is not protected under federal laws that prohibit sex discrimination in health care. It would reverse an Obama-era policy that the Trump administration already is not enforcing.

“The actions today are part and parcel of this administration’s efforts to erase LGBTQ people from federal regulations and to undermine nondiscrimination protections across the board,” said Omar Gonzalez-Pagan, a senior attorney on health care at Lambda Legal, a civil rights organization representing LGBT people.

The administration also has moved to restrict military service by transgender men and women , proposed allowing certain homeless shelters to take gender identity into account in offering someone a bed for the night and concluded in a 2017 Justice Department memo that federal civil rights law does not protect transgender people from discrimination at work. As one of her first policy moves, Education Secretary Betsy DeVos withdrew guidance that allowed students to use bathrooms matching their gender identity.

More than 1.5 million Americans identify as transgender , according to the Williams Institute, a think tank focusing on LGBT policy at the UCLA School of Law. A bigger number — 4.5% of the population— identify as lesbian, gay, bisexual or transgender (LGBT), according to Gallup.

Pushing back against critics, the HHS official overseeing the new regulation said transgender patients would continue to be protected by other federal laws that bar discrimination on the basis of race, color, national origin, sex, age and disability.

“Everyone deserves to be treated with dignity and respect,” said Roger Severino, who heads the HHS Office for Civil Rights. “We intend to fully enforce federal laws that prohibit discrimination.”

Asked about the charge that the administration has opened the door to discrimination against transgender people seeking needed medical care of any type, Severino responded, “I don’t want to see that happen.”

In some places LGBT people are protected by state laws, said Lambda Legal attorney Gonzalez-Pagan, “but what do you say to people living in a state that doesn’t have state-explicit protections? Do they move their home?”

Behind the dispute over legal rights is a medically recognized condition called “gender dysphoria” — discomfort or distress caused by a discrepancy between the gender that a person identifies as and the gender at birth. Consequences can include severe depression. Treatment can range from sex-reassignment surgery and hormones to people changing their outward appearance by adopting a different hairstyle or clothing.

Many social conservatives disagree with the concept.

“Sex is not subjective, it is an objective biological reality,” Tony Perkins, president of the Family Research Council, said in a statement supporting the Trump administration’s move. The proposed rule will ensure that federal law “isn’t used as a vehicle to advance transgender or abortion politics,” he said.

Under the Obama-era federal rule, a hospital could be required to perform gender-transition procedures such as hysterectomies if the facility provided that kind of treatment for other medical conditions. The rule was meant to carry out the anti-discrimination section of the Affordable Care Act, which bars sex discrimination in health care but does not use the term “gender identity.”

The proposed new rule would also affect the notices that millions of patients get in multiple languages about their rights to translation services. Such notices often come with insurer “explanation of benefits” forms. The Trump administration says the notice requirement has become a needless burden on health care providers, requiring billions of paper notices to be mailed annually at an estimated five-year cost of $3.2 billion.

The American Civil Liberties Union served notice it expects to challenge the rule in court when it is final. Louise Melling, ACLU deputy legal director said the potential impact could go beyond LGBT people and also subject women to discrimination for having had an abortion.

That’s because the proposal would remove “termination of pregnancy” as grounds for making a legal claim of sex discrimination in health care, one of the protections created in the Obama years. Abortion opponents had argued that the Obama regulation could be construed to make a legal argument for federal funding of abortions.

UCLA legal scholar Jocelyn Samuels, who oversaw the drafting of the HHS transgender anti-discrimination rule under Obama, said that rule reflected established legal precedent that transgender people are protected by federal anti-discrimination laws.

“This administration has manifested its intent to roll back that well-considered understanding in every context,” she said.

Samuels questioned the timing of the Trump action, since the U.S. Supreme Court has agreed to hear three cases this year looking at whether federal civil rights law bans job discrimination on the basis of sexual orientation and gender identity.

The proposed rule change is unlikely to have immediate consequences beyond the realm of political and legal debate. It faces a 60-day comment period and another layer of review before it can be finalized.

HHS official Severino said the Trump administration is going back to the literal text of the ACA’s anti-discrimination law to correct an overly broad interpretation.

The Obama rule dates to a time when LGBT people were gaining political and social recognition. But a federal judge in Texas has said the rule went too far by concluding that discrimination on the basis of gender identity is a form of sex discrimination.

Severino said the proposed rule does not come with a new definition of a person’s sex. Earlier, a leaked internal document suggested the administration was debating whether to issue an immutable definition of sex, as based on a person’s genital organs at birth.

Source: NewsMax Politics

FILE PHOTO - U.S. President Donald Trump boards Marine One to depart for Japan
FILE PHOTO – U.S. President Donald Trump leaves the Oval Office to speak to the news media before boarding Marine One to depart for travel to Japan from the South Lawn of the White House in Washington, U.S., May 24, 2019. REUTERS/Leah Millis

May 24, 2019

WASHINGTON (Reuters) – U.S. President Donald Trump, saying there is a national emergency because of tensions with Iran, is clearing the sale of billions of dollars worth of weapons to Saudi Arabia and other countries, U.S. senators said on Friday, despite strong resistance to the plan from both Republicans and Democrats.

The administration has informed congressional committees that it will go ahead with 22 arms deals worth some $8 billion, congressional aides said, sweeping aside a long-standing precedent for congressional review of such sales.

(Reporting by Patricia Zengerle; Editing by James Dalgleish)

Source: OANN

FILE PHOTO - U.S. President Donald Trump boards Marine One to depart for Japan
FILE PHOTO – U.S. President Donald Trump leaves the Oval Office to speak to the news media before boarding Marine One to depart for travel to Japan from the South Lawn of the White House in Washington, U.S., May 24, 2019. REUTERS/Leah Millis

May 24, 2019

WASHINGTON (Reuters) – U.S. President Donald Trump, saying there is a national emergency because of tensions with Iran, is clearing the sale of billions of dollars worth of weapons to Saudi Arabia and other countries, U.S. senators said on Friday, despite strong resistance to the plan from both Republicans and Democrats.

The administration has informed congressional committees that it will go ahead with 22 arms deals worth some $8 billion, congressional aides said, sweeping aside a long-standing precedent for congressional review of such sales.

(Reporting by Patricia Zengerle; Editing by James Dalgleish)

Source: OANN

Indian Prime Minister Narendra Modi gestures as he is presented with a garland by Bharatiya Janata Party (BJP) leaders after the election results in New Delhi
Indian Prime Minister Narendra Modi gestures as he is presented with a garland by Bharatiya Janata Party (BJP) leaders after the election results in New Delhi, India, May 23, 2019. REUTERS/Adnan Abidi

May 24, 2019

By Aditya Kalra and Aditi Shah

NEW DELHI (Reuters) – Foreign companies in India have welcomed Prime Minister Narendra Modi’s election victory for the political stability it brings, but now they need to see him soften a protectionist stance adopted in the past year.

Modi’s pro-business image and India’s youthful population have lured foreign investors, with U.S. firms such as Amazon.com, Walmart and Mastercard committing billions of dollars in investments and ramping up hiring.

India is also the biggest market by users for firms such as Facebook Inc, and its subsidiary, WhatsApp.

But from around 2017, critics say, the Hindu nationalist leader took a harder, protectionist line on sectors such as e-commerce and technology, crafting some policies that appeared to aim at whipping up patriotic fervor ahead of elections.

“I hope he’s now back to wooing businesses,” said Prasanto Roy, a technology policy analyst based in New Delhi, who advises global tech firms.

“Global firms remain deeply concerned about the lack of policy stability or predictability, this has sent a worrying message to global investors.”

India stuck to its policies despite protests and aggressive lobbying by the United States government, U.S.-India trade bodies and companies themselves.

SMALL HURDLES

Modi was set to hold talks on Friday to form a new cabinet after election panel data showed his Bharatiya Janata Party had won 302 of the 542 seats at stake and was leading in one more, up from the 282 it won in 2014.

After Modi’s win, about a dozen officials of foreign companies in India and their advisers told Reuters they hoped he would ease his stance and dilute some of the policies.

Other investors hope the government will avoid sudden policy changes on investment and regulation that catch them off guard and prove very costly, urging instead industry-wide consultation that permits time to prepare.

Protectionism concerns “are small hurdles you have to go through”, however, said Prem Watsa, the chairman of Canadian diversified investment firm Fairfax Financial, which has investments of $5 billion in India.

“There will be more business-friendly policies and more private enterprise coming into India,” he told Reuters in an interview.

TECH, HEALTHCARE AND BEYOND

Among the firms looking for more friendly steps are global payments companies that had benefited since 2016 from Modi’s push for electronic payments instead of cash.

Last year, however, firms such as Mastercard and Visa were asked to store more of their data in India, to allow “unfettered supervisory access”, a change that prompted WhatsApp to delay plans for a payments service.

Modi’s government has also drafted a law to clamp similar stringent data norms on the entire sector.

But abrupt changes to rules on foreign investment in e-commerce stoked alarm at firms such as Amazon, which saw India operations disrupted briefly in February, and Walmart, just months after it invested $16 billion in India’s Flipkart.

Policy changes also hurt foreign players in the $5-billion medical device industry, such as Abbott Laboratories, Boston Scientific and Johnson & Johnson, following 2017 price caps on products such as heart stents and knee implants.

Modi’s government said the move aimed to help poor patients and curb profiteering, but the U.S. government and lobby groups said it harmed innovation, profits and investment plans.

“If foreign companies see their future in this country on a long-term basis…they will have to look at the interests of the people,” Ashwani Mahajan, an official of a nationalist group that pushed for some of the measures, told Reuters.

That view was echoed this week by two policymakers who said government policies will focus on strengthening India’s own companies, while providing foreign players with adequate opportunities for growth.

Such comments worry foreign executives who fear Modi is not about to change his protectionist stance in a hurry, with one offical of a U.S. tech firm saying, “I’d rather be more worried than be optimistic.”

(Reporting by Aditya Kalra and Aditi Shah; Additional reporting by Euan Rocha and Manoj Kumar; Editing by Martin Howell and Clarence Fernandez)

Source: OANN

Indian Prime Minister Narendra Modi gestures as he is presented with a garland by Bharatiya Janata Party (BJP) leaders after the election results in New Delhi
Indian Prime Minister Narendra Modi gestures as he is presented with a garland by Bharatiya Janata Party (BJP) leaders after the election results in New Delhi, India, May 23, 2019. REUTERS/Adnan Abidi

May 24, 2019

By Aditya Kalra and Aditi Shah

NEW DELHI (Reuters) – Foreign companies in India have welcomed Prime Minister Narendra Modi’s election victory for the political stability it brings, but now they need to see him soften a protectionist stance adopted in the past year.

Modi’s pro-business image and India’s youthful population have lured foreign investors, with U.S. firms such as Amazon.com, Walmart and Mastercard committing billions of dollars in investments and ramping up hiring.

India is also the biggest market by users for firms such as Facebook Inc, and its subsidiary, WhatsApp.

But from around 2017, critics say, the Hindu nationalist leader took a harder, protectionist line on sectors such as e-commerce and technology, crafting some policies that appeared to aim at whipping up patriotic fervor ahead of elections.

“I hope he’s now back to wooing businesses,” said Prasanto Roy, a technology policy analyst based in New Delhi, who advises global tech firms.

“Global firms remain deeply concerned about the lack of policy stability or predictability, this has sent a worrying message to global investors.”

India stuck to its policies despite protests and aggressive lobbying by the United States government, U.S.-India trade bodies and companies themselves.

SMALL HURDLES

Modi was set to hold talks on Friday to form a new cabinet after election panel data showed his Bharatiya Janata Party had won 302 of the 542 seats at stake and was leading in one more, up from the 282 it won in 2014.

After Modi’s win, about a dozen officials of foreign companies in India and their advisers told Reuters they hoped he would ease his stance and dilute some of the policies.

Other investors hope the government will avoid sudden policy changes on investment and regulation that catch them off guard and prove very costly, urging instead industry-wide consultation that permits time to prepare.

Protectionism concerns “are small hurdles you have to go through”, however, said Prem Watsa, the chairman of Canadian diversified investment firm Fairfax Financial, which has investments of $5 billion in India.

“There will be more business-friendly policies and more private enterprise coming into India,” he told Reuters in an interview.

TECH, HEALTHCARE AND BEYOND

Among the firms looking for more friendly steps are global payments companies that had benefited since 2016 from Modi’s push for electronic payments instead of cash.

Last year, however, firms such as Mastercard and Visa were asked to store more of their data in India, to allow “unfettered supervisory access”, a change that prompted WhatsApp to delay plans for a payments service.

Modi’s government has also drafted a law to clamp similar stringent data norms on the entire sector.

But abrupt changes to rules on foreign investment in e-commerce stoked alarm at firms such as Amazon, which saw India operations disrupted briefly in February, and Walmart, just months after it invested $16 billion in India’s Flipkart.

Policy changes also hurt foreign players in the $5-billion medical device industry, such as Abbott Laboratories, Boston Scientific and Johnson & Johnson, following 2017 price caps on products such as heart stents and knee implants.

Modi’s government said the move aimed to help poor patients and curb profiteering, but the U.S. government and lobby groups said it harmed innovation, profits and investment plans.

“If foreign companies see their future in this country on a long-term basis…they will have to look at the interests of the people,” Ashwani Mahajan, an official of a nationalist group that pushed for some of the measures, told Reuters.

That view was echoed this week by two policymakers who said government policies will focus on strengthening India’s own companies, while providing foreign players with adequate opportunities for growth.

Such comments worry foreign executives who fear Modi is not about to change his protectionist stance in a hurry, with one offical of a U.S. tech firm saying, “I’d rather be more worried than be optimistic.”

(Reporting by Aditya Kalra and Aditi Shah; Additional reporting by Euan Rocha and Manoj Kumar; Editing by Martin Howell and Clarence Fernandez)

Source: OANN

FILE PHOTO: Illustration photo of a China yuan note
FILE PHOTO: A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo

May 24, 2019

By Winni Zhou and John Ruwitch

SHANGHAI (Reuters) – As China’s yuan slips to historically weak levels against the dollar, the central bank’s atypical light touch is spurring speculation that policymakers want to be more judicious in their intervention and have no specific target for the currency.

The yuan has lost more than 2.5% against the dollar since the festering China-U.S. trade dispute took a turn for the worse with tariff increases early this month. It is now less than 0.1 yuan away from the 7-per-dollar level authorities have in the past indicated as a floor.

A weakening yuan risks sparking outflows, a major concern for policymakers keen to retain investor confidence in a slowing economy and acrimonious trade war with the United States.

But the People’s Bank of China (PBOC) has done little to keep the yuan in check, beyond issuing yuan-denominated bills in Hong Kong and setting the managed currency’s daily mid-point consistently stronger than market expectations.

“My sense is that 7 is no longer so critical as in 2016. Policymakers are more confident,” said Tommy Xie, head of Greater China research at OCBC Bank in Singapore. “It also depends on the cost of defending 7.”

In 2015, a one-off 2% yuan devaluation fueled depreciation expectations, and Beijing burned through about $1 trillion of foreign exchange reserves to fight back.

In 2018, to hold the currency steady, the PBOC raised the cost of shorting the yuan by hiking reserve requirements on forwards. State-owned banks also used swaps and sold dollars to prop up the local unit.

Despite the trade war, it was not until this week that senior central bank officials launched a verbal campaign to remind the market that China can keep the yuan “basically stable” and draw on a toolbox of policies to manage fluctuations.

“Nothing has gone wrong, and (we) will not allow anything to go wrong,” Liu Guoqiang, PBOC vice governor, told the Financial News, a newspaper run by the central bank.

The PBOC did not respond immediately to faxed questions from Reuters about its policy and tactics relating to yuan levels.

(GRAPHIC: China’s falling yuan approaches 7/dollar – https://tmsnrt.rs/2W6Aoqb)

SUBTLE MESSAGE

To yuan watchers, the central bank’s perfunctory actions and messaging suggest a higher degree of comfort with a weaker yuan, while the currency’s stability against a basket of trade-weighted currencies is evidence it is not encouraging excess depreciation.

“The authorities are providing only the support needed to cap yuan weakness, rather than trying to strengthen the currency significantly,” Lemon Zhang, a strategist at Standard Chartered Bank wrote in a note.

A weaker yuan would theoretically help exporters, many of whom are feeling the pinch of U.S. tariffs on billions of dollars worth of made-in-China goods.

BofAML analysts Claudio Piron and Ronald Man reckon China will limit the yuan’s weakness in the run-up to a G20 summit at the end of June, when U.S. President Donald Trump and his Chinese counterpart Xi Jinping might meet.

If that meeting fails to produce a breakthrough easing trade tensions, “it is clear that China has the capacity and need for yuan depreciation to dollar/yuan 7.13. Fiscal stimulus and monetary easing would be required to support China’s economy,” they said.

But analysts suspect the PBOC’s strategy is not just about targeting yuan levels but also involves managing its currency reserves and a growing international role for the yuan. Those explain the central bank’s reluctance to reduce its dollar reserves too quickly or drive up interest rates in the offshore yuan market in order to make it expensive to short-sell the currency.

“If the central bank chooses to intervene directly in the market, a decline in the reserves to $2.9 trillion from $3 trillion would trigger greater shock to market confidence,” said Raymond Yeung, ANZ’S chief Greater China economist in Hong Kong.

Yeung says the PBOC “is unwilling to see a huge gap between onshore and offshore yuan as that would affect international institutions’ judgment of whether the yuan is capable as a reserve currency”.

The offshore yuan this week has been relatively weaker than the onshore one, but the PBOC’s sale of its debt in Hong Kong, intended to drain offshore yuan supplies, has been small scale.

As the central bank juggles multiple objectives, its injections of cash onshore, aimed at spurring lending in a slowing economy, have also been modest, in part to guard the exchange rate.

(Editing by Vidya Ranganathan and Richard Borsuk)

Source: OANN


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