People’s Bank of China (PBOC) tries to halt RMB depreciation:After the RMB fell below 7 RMB per US dollar (USD) in September, the PBOC introduced a reserve requirement of 20% for forward foreign exchange contracts. As the latest of several measures the PBOC has employed attempting to slow the RMB’s depreciation, the reserve requirement makes it costlier for Chinese banks and their clients to hedge against a decline in the value of the RMB, which reduces the volume of RMB- USD trades. The PBOC has not employed such a step since the RMB fell sharply in August 2018.
Digital RMB pilots expand domestically: the PBOC announced in September that trials for China’s central bank digital currency would be expanded provincewide in Guangdong, Jiangsu, Hebei, and Sichuan provinces, though no timeline was provided. In July, the PBOC indicated the digital currency pilots, first launched in 2019, had extended to 23 cities and regions in China, with 4.5 million merchants accepting digital currency payments as of the end of May 2022.
Hong Kong initial product offerings (IPOs) tank:The latest two IPOs to list in September on the Hong Kong Stock Exchange underperformed, falling from their initial listing price by as much as 33.5% on their first day public. The poor performance follows a difficult year for the exchange, which has seen an 80 percent decline in the number of new listings from the same period in 2021.
Supply chain disruptions hit China, too:Global supply chain disruptions and Chinese port lockdowns have led to critical shortages of medical equipment at Chinese hospitals during the pandemic, according to state-owned media outlet Sixth Tone. Chinese heart surgeons have warned that aortic grafts and cardiac stents, which China imports, are in dangerously short supply.