YuanAir carriersstill in play beatingfor SDRthe inclusionoil slump
Becky Liu, a Standard Chartered Plc strategist, said: “It shows that the fund is preparing fuel for hedgingthe possibilityin 2008. that the yuan “(Chinesewill be airlines) included haven’tin the SDR hedged this for timea around”.long time after they In a sufferedreport releaseda big loss on duringTuesday, the 2008-09the IMF financialsaid at the crisis, time andof the they’velast reviewbeen veryin 2010, restrainedChina met since,” the said gateway Geoffrey export Cheng, criterion, a Hong meaning Kong-basedthe use analystof yuan, at in BOCOM international Internationaltrade, but Holdingsthe currencyCo. was not included in the “As SDRa result, basket they’reas it was benefitingnot judged now.” to be freely usable, the second AirAsia currencyBhd, Southeast selection Asia’scriterion. biggest budget carrier, and its AirAsiaThe reportX Bhd said unit that have across gonea range completelyof indicators, unhedged the for yuan 2016,is now according exhibitingto groupa significantCEO Tony degree Fernandes.of About international50 percent use of and AirAsia’s trading. fuel needs for this year are The hedged.IMF official Tiwari said the “Nice yuan to is wakethe only up currencyand see not Brent currentlybelow $50,”in the FernandesSDR basket tweetedthat meetson Tuesday.the export “That’s criterion. a magical Therefore, number a for key us focusin theof the airline current business.” review will be whetherSome Asianthe yuan airlines,also meets however, the freely have usable continued criterion hedging,in order despiteto be the included decline in in fuelthe SDR prices. basket.
Historically,Singapore Airlines decisions Ltd,that have Southeast changed Asia’s the biggest valuation carrier, methodsaid last have month been that takenits savingswith a from70 percentlower fuel majority.prices were partially Eswar offset Prasad,by hedginga professor lossesof tradeand a policy strongerat CornellUS dollar Universityin the quarterand a that senior ended fellow in at June.the BrookingsBefore hedging, Institution, Singapore said Air’sthe IMF’sfuel costs review dropped indicates33 percentthat China because hasof lower made prices. significant progressWith almoston meeting60 percentthe “freely of its usable”fuel requirementscriterion for for the the yuan quarterto be hedged includedat an in average theSDR of basket$110 per but barrel,that morethe carrier progress lost is S$263 needed. million ($191 million) on its “The hedges. decision about the yuan’s Singapore inclusion Air in said the basketit had hinges hedged 55 on percent reforms of its suchjet fuelas greaterneeds for exchangethe July-Septemberrate flexibility, quarter more at investoran average access price to of onshore$104 a barrel. foreign exchange and securities markets, and availability of a wider range of government debt securities,” said Prasad, a former IMF China division chief.
He said IMF staff have also signaled that the yuan’s inclusion in the SDR basket will ultimately be amatter of judgment by the IMF executive board since the decision falls right at the margin. Contact the writers at email@example.com and chenweihua @chinadaily.com.cn