Myanmar was spending money too quickly during this period.
Furthermore, many upcoming investnt plans had a significant impact on its trade settlents with Huaxia, necessitating the introduction of so restrictions; otherwise, Lang Cai would now be dealing with problems other than printing money and the devaluation of the Myanmar Kyat.
It would be the depletion of RMB reserves.
The currency issues faced by Myanmar were nearly identical to those of Huaxia.
It’s just that Myanmar’s risk resistance capacity was many tis weaker than Huaxia’s.
Although Huaxia had ample foreign exchange reserves,
The profits generated by foreign enterprises investing in Huaxia, if they were to withdraw in large quantities, would strain Huaxia’s foreign exchange reserves. The current scale of foreign investnt in the dostic market indicates the potential scale of capital withdrawal.
When this foreign capital leaves, it will be exchanged for U.S. dollars.
So when you do the math,
Are several trillion U.S. dollars of foreign reserves a lot?
Heh.
A lot of what?
If foreign companies were to transfer profits back to their countries on a large scale, it would be questionable whether the Central Bank’s foreign cash reserves would be sufficient. It might be necessary to sell a large amount of U.S. Treasury bonds, and a halving of the foreign exchange reserves wouldn’t be surprising.
This is exactly what had happened in Myanmar.
In Huaxia, a few billion U.S. dollars is not a significant issue anymore.
But in Myanmar,
Even if a few hundred million U.S. dollars wanted to leave, Myanmar would have to agonize and impose restrictions, given the preciousness of their foreign exchange reserves. As a forr agricultural country, earning money relied primarily on selling resources and farming.
Barely saving money, expanding production, and investing in road construction and factories, they faced continuous depletion of foreign exchange reserves before they could see any profits, sothing Lang Cai would find agonizing.
Thus,
The Myanmar Central Bank and several major Huaxia companies had a discussion.
And they kept this substantial sum of money in Myanmar.
To preserve its value,
It was converted into Asia Dollars.
And kept at the Myanmar Bank.
"I rember Myanmar Bank took out a loan from us, right? That huge amount of money, more than a hundred billion, why not use it to transfer the funds of our state-owned enterprises that are stuck?" Liu Jin suggested.
Other economists found the idea feasible.
This ti, the funds stuck were less than a hundred billion RMB, and Myanmar Bank’s loan was more than adequate to cover it.
But then,
Yuan Yi shook his head helplessly and said, "It’s gone, they’ve spent it all."
Upon hearing this,
They were shocked.
"What? All spent? That’s impossible, isn’t it?"
"Indeed, more than a hundred billion? They spent it even faster than Myanmar?"
"Exactly, where has all the money gone in just a few months?"
"..."
The conference room erupted into chaos.
More than a hundred billion RMB.
What concept is that?
You suddenly tell it’s gone?
After Yuan Yi cald everyone down, he said, "There was originally money. Our previously signed agreent stated the loan would be disbursed in installnts, but their investnt was too sizable and scattered, and a lot of money was already withdrawn, earmarked for various projects.
Furthermore, they applied for a rapid loan, and now less than twenty billion RMB remains, which they claim is intended as risk capital to maintain company operations and is untouchable."
"..."
Faced with such speed of spending money,
What could they say?
"Then there’s nothing we can do. They don’t have much RMB in hand, and they currently have a trade deficit with our country. The gap can be bridged, but it shouldn’t be too wide. We need to set an upper limit; if exceeded, they would have to use property as collateral," Liu Jin pondered.
"I suggest they take out that twenty billion RMB and use it as an advance."
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"You say it so lightly, but will they agree? It’s a mortgage loan against their actual tangible assets, and this ti it’s for helping our country’s enterprises to repatriate funds, which is a different nature."
"We’ve helped them so much; such a request shouldn’t be too much to ask."
"It’s not too much, but if they need funds in the future, they’ll still have to take out loans. This is tantamount to an exercise in futility. It’s better to create a separate funding channel. Less than a hundred billion is not too much."
"..."
The conference room suddenly erupted into debate.
One side believed that we should just go ahead with the plan; it’s not a big deal. Especially since the total volu of trade between the two sides is constantly growing, the situation in Myanmar is relatively stable, and the developnt of the Myanmar Economic Zone is going well—there would be no loss.
However, the other side felt that holding Asia Dollars was very risky, and it might beco worthless at any ti, even though the Myanmar Kyat was a bit weak. Still, at least it was the legal tender of Myanmar, which surely wouldn’t fail.
Both sides had their reasons.
Yuan Yi was listening the whole ti.
His subordinates quickly ford a report.
He didn’t participate because the final decision wasn’t his to make.
The purpose of such seminars wasn’t to let the experts co up with a conclusion, but to create a comprehensive Risk Assessnt Report, supplenting the leaders’ decision-making with facts and theoretical basis.
In the end, it’s the upper class of the Central Bank that decides which policies to implent.
The more you argue, the clearer the reasoning becos.
That’s exactly the situation here.
One hour later.
The eting ended.
Yuan Yi handed over the minutes of the eting to his subordinates.
At three in the afternoon.
A detailed twenty-page seminar report was freshly out of the oven.
It was submitted to the leadership of the Central Bank.
The next morning.
The Central Bank convened and decided to temporarily include the Asia Dollar in the reserve currency list, henceforth adding the Asia Dollar to the currencies used for trade settlents with the Myanmar Economic Zone on top of the Myanmar Kyat.
This decision took effect the following day.
Of course.
It was also necessary to communicate with Lang Cai’s side, as Huaxia couldn’t decide unilaterally.
Regarding Huaxia’s actions.
Lang Cai didn’t say much but expressed understanding.
He had no choice but to understand; Myanmar’s RMB reserves were not sufficient, and the US dollar reserves were being depleted. A significant devaluation of the Myanmar Kyat was imminent, so it was reasonable for Huaxia companies to seek a new channel for capital outflows.
But this was also good.
Let the Asia Dollar first alleviate the pressure on the Myanmar Central Bank.
It gave him a breather as well.
As for the consequences and influences, Lang Cai didn’t care. It was just a total of ten billion RMB, and Myanmar was in a special period. The Asia Dollar got a bit of advantage, breaking the quota limit he had set.
But Huaxia, a great power,
Would not give the Asia Dollar the opportunity to benefit from it.
Thinking of this,
Lang Cai felt reassured.
And he felt delighted inside,
Because Huaxia’s policy would rapidly deplete the RMB held by Myanmar Bank and, if possible, even consu Myanmar Bank’s US dollar and other Foreign Currency reserves.
This way, just the capital transfers of local enterprises alone would be enough to give Myanmar Bank a headache.
In the past, the Myanmar Central Bank bore all this pressure alone.
Now, they had soone to share the burden.
Lang Cai even thought Ling must have lost his mind to make such a request to Huaxia.
...
In the Myanmar Economic Zone.
Hearing that a portion of the non-trade funds could be transferred back to the country,
Many companies imdiately took action.
In just one day,
Huaxia enterprises transferred back nearly four billion RMB. They exchanged all their Asia Dollars for RMB at the Myanmar Economic Zone Branch of the Industrial and Comrcial Bank of Huaxia, which would then arrange for cashing out with the Central Bank.
This made the bosses of these Huaxia enterprises heave a huge sigh of relief.
Although Myanmar Bank had said,
You can exchange for RMB, but if you want to exchange RMB for Asia Dollars again, it must be for trade purposes. This made several businessn who were optimistic about the Myanmar Economic Zone hesitate.
But most Huaxia enterprises still chose to transfer their money back to the country for safety.
This semi-free Currency Exchange model was mainly to prevent anyone from maliciously depleting the Central Bank of Huaxia’s Asia Dollar reserves and from completing the task of stabilizing reserves. Tang Qing specifically added this asure.
You can’t let people ss around. Huaxia also supports this kind of behavior. Currently, the future of the Asia Dollar is unclear, so it is better to keep so control over the freedom of Currency Exchange between the two parties.
Just like that,
Tang Qing had completed one of his Asia Dollar Reserve tasks.
The rest... he still damn had nine to go.
He then turned his attention to the surrounding countries.
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