Taiwanese insurers are locked into holding U.S. dollar bonds that trade below par, putting pressure on Taiwan’s central bank to intervene to block currency adjustment to preserve their capital.
There is too much talk about the dollar’s role as a reserve currency and too little talk about expectations of exceptional returns. Reserve accumulation hasn’t driven the financing of the U.S. current account deficit in recent years.
The Mar-a-Lago Accord refers to a blueprint from one of President Trump’s top advisors that would mark an inflection point for the global economic order—but it is unlikely to get the cross-border coordination required to succeed.
Given the size and composition of its external lending, China should be clearing far more interest income on its reserves and policy lending than SAFE reports.
Outright seizure of the Russian Central Bank’s hundreds of billions in frozen assets is currently off the table, but it is still possible to obtain large sums for Ukraine from the interest income on these assets.
China’s pivot to a new strategy of indirect intervention through its large state banks requires new approaches to policing currency policies by both the U.S. Treasury and IMF.
The dollar’s role as the primary reserve currency for the global economy allows the United States to borrow money more easily and impose painful financial sanctions. Other countries are beginning to consider alternatives.
China's current balance of payments data doesn't quite make sense. Significant and poorly explained gaps exist between the reported BoP data and the underlying source data. China's economy is so big that data gaps really matter.
China and Ukraine have developed a strong economic and strategic relationship, but the West’s response to Russia’s war could push Beijing and Moscow closer together.
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