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Deutsche Bank warns that the Federal Reserve's potential withdrawal of its liquidity backstop could jeopardize the dollar's status as a reserve currency, marking the most significant risk since World War II. Concerns about the reliability of Fed swap lines may prompt global de-dollarization, especially among Western allies, as countries like China and Russia continue to reduce their reliance on the US financial system. The Fed's role as the world's lender of last resort is crucial, and any hesitation to provide liquidity could lead to increased demand for dollars and destabilize US asset markets.
Deutsche Bank warns that the Federal Reserve's potential withdrawal of its liquidity backstop could jeopardize the dollar's status as a reserve currency, marking a significant risk since World War II. Informal discussions among European officials suggest concerns over the reliability of Fed swap lines, which allow global institutions to borrow dollars during financial stress. Such fears could drive a shift towards de-dollarisation among America's Western allies, especially if the Trump administration influences the Fed's actions.
The central bank has issued digital currency to seven banks, including Kookmin and Shinhan, as part of a pilot program. Meanwhile, Xiaomi plans to raise up to $5.27 billion through a share placement for business expansion and tech investment. In Japan, private equity firms are targeting the fragmented HR tech market, driven by low interest rates and a focus on governance, despite challenges from competition and global firms.
The Bank of Korea is actively testing a digital currency for potential real-world applications. This initiative marks a significant step in exploring the future of digital finance and its integration into everyday transactions. The outcomes of these tests could shape the landscape of monetary policy and consumer behavior.
The Bank of Korea will launch a digital currency pilot program, “Project Han River,” from April 1 to June 30, distributing digital currency to seven banks for use by 100,000 individuals at various retailers via QR code. Participants can register starting March 25, with a holding limit of 1 million won and a total cap of 5 million won. The initiative aims to streamline payment processes and reduce transaction fees while addressing issues like benefit fraud.
Morgan Stanley forecasts that the Bank of Korea will implement three additional interest rate cuts this year, bringing the base rate down to 2%. Following a recent reduction from 3% to 2.75%, the bank's Monetary Policy Committee acknowledged increasing downward growth pressures, prompting this continued easing. Morgan Stanley projects South Korea's economic growth at 1.2%, below the Bank of Korea's estimate of 1.5%.
Morgan Stanley forecasts that the Bank of Korea will implement three additional interest rate cuts this year, bringing the benchmark rate down to 2.00%. This prediction follows a more pessimistic economic growth outlook of 1.2% compared to the Bank of Korea's 1.5%. The Monetary Policy Committee acknowledged increased downward pressure on growth, influenced by a weakened labor market and high household debt, while also addressing inflation and foreign exchange volatility concerns.
The Bank of Korea has decided against holding bitcoin as a reserve asset, citing significant risks associated with its volatility and regulatory uncertainties. This decision reflects a cautious approach to integrating cryptocurrencies into national financial strategies.
The Bank of Korea has decided against creating a bitcoin reserve due to concerns over its high volatility and non-compliance with IMF guidelines, which emphasize prudent risk management. This cautious approach mirrors the stance of financial authorities in Japan, Switzerland, and the European Central Bank, contrasting with the US's recent move to establish a Strategic Bitcoin Reserve. Meanwhile, South Korea is easing restrictions on institutional cryptocurrency trading and working on a legal framework for stablecoin oversight.
South Korea's yield curve is expected to steepen due to a surge in new debt issuance coinciding with anticipated interest rate cuts by the Bank of Korea in early 2025. Analysts predict that these cuts will lower yields on shorter-dated securities, while record government borrowing and high US Treasury yields will push up long-term yields.
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The information provided herein is generated by experimental artificial intelligence and is for informational purposes only.
fears over fed backstop could undermine dollar's reserve currency status
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17:21 27.03.2025
fed backstop concerns could jeopardize dollar's reserve currency status
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17:02 27.03.2025
private equity firms target japan's fragmented hr tech market for growth
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10:30 26.03.2025
bank of korea explores real-world applications for digital currency
05:48 25.03.2025
Bank of Korea launches digital currency pilot program for real-world testing
05:10 25.03.2025
Morgan Stanley predicts Bank of Korea to cut rates three more times
09:27 19.03.2025
Morgan Stanley forecasts multiple interest rate cuts by Bank of Korea
08:11 19.03.2025
Bank of Korea rejects bitcoin reserves due to associated risks
11:01 17.03.2025
Bank of Korea rejects bitcoin reserve due to volatility and risks
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08:20 17.03.2025
Korea's Yield Curve Expected to Steepen Amid Record Bond Issuance
01:21 09.12.2024
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