1 China currency reserves plunge (BBC) China’s foreign currency reserves plunged by $99.5bn in January, the People’s Bank of China reported. China has been running down its vast foreign currency reserves in an attempt to boost the value of its own currency and stem a flow of funds overseas.
At $3.23 trillion, China still has the world’s biggest reserve of foreign currency holdings. But that has declined by $420bn over six months and stands at the lowest level since May 2012. The Chinese authorities fear a rapid devaluation of their currency, as it could destabilise the economy.
Many Chinese businesses hold debt in dollars and managing those debts with a severely weakened yuan could cause problems and some companies to fail. So China has been trying to engineer an ordered devaluation of the yuan, but that is proving hard to deliver.
Investors have been trying to pull funds out of investments priced in yuan and speculators have been betting on further falls in the currency. To stabilise the situation China has been selling dollars and buying yuan.
Commenting on the decline, veteran economist, George Magnus noted that there is “confusion” over China’s foreign currency policy. “Clearly this can’t go on for long,” he tweeted, referring to the fall in currency reserves.
2 US debt crosses $19trn (Khaleej Times) The US is now officially a whopping $19 trillion in debt – that’s T for trillion which translates to nearly $19,000 billion. According to the latest figures released by the US Treasury Department, technically the US federal government is in debt, The Washington Times reported.
According to the report, President Obama took office in 2009 with $10.6 trillion, adding up to $8 trillion during his two terms – taking the national debt to $19 trillion at a ‘record pace’. The Congressional Budget Office has said that this is likely to increase further.
As of February 5, the total federal government debt stood at $19.01 trillion. Of this $13.7 trillion is debt held by the public and the rest is internal government borrowing, including the IOUs the government has left in the Social Security trust fund over the last three decades.
So how much is the US citizen in debt? According to a popular US national debt counter site, http://www.us.debtclock.org: Debt per US citizen is $58,853 and debt per taxpayer is $158,836.
3 A quarter of North Sea oil platforms could be scrapped in 10 years (The Guardian) Almost 150 oil platforms in UK waters could be scrapped within the next 10 years, according to industry analysts.
Douglas Westwood, which carries out market research and consultancy work for the energy industry worldwide, said it anticipated that “146 platforms will be removed from the UK during 2019-2026”, around 25% of the current total.
The North Sea has been hit hard by plummeting oil prices, with the industry body Oil and Gas UK estimating 65,000 jobs have been lost in the sector since 2014. But Douglas Westwood said that decommissioning could provide an opportunity for the specialist firms involved in the work.
A paper on its website predicted that the “UK will dominate decommissioning expenditure”. This is due to the “high number of ageing platforms in the UK, which have an average age of over 20 years and are uneconomic at current commodity prices, as a result of high maintenance costs and the expensive production techniques required for mature fields”.