Currency Wars

Currency wars had been going on in the history. The first major instance being in 1930’s ,followed by 1970-80.

The latest in this direction was witnessed in August 2015 when China devalued it’s currency Renminbi on 11th and 13th August 2015. It’s effect on the currencies of Emerging market currencies was substantial.

Here we captured the movements in currencies/USD and the movements in the domestic treasury yields of 5year and 10year securities, of BRIICS- Indonesia, Brazil, China, India, Russia and South Africa vis-a-vis India.

For each currency, we have a slide representing the total picture.Panel discussion at FAI Annual assembly 2-4 Oct 2015- Kualumpur.-D.V.S.S.V.Prasad, CEO,FIMMDA.

Comparative change curvefor Indonesian Rupiah

12500

13000

13500

14000

14500

15000

0

2

4

6

8

10

12

IDR

PR

ICE

Ind

on

esi

a 1

0yr

& 5

yr B

on

d Y

ield

Indonesia 10-Yr Bond Yield Indonesia 5-Yr Bond Yield IDR Price

Change analysis - INDONESIA

INDONESIAExchange

Rate 10 Yr 5 Yr

change from 1/8/15 to 13/8/15 240 0.084 0.05

percent change 1.777 0.974 0.612

change from 1/8/15 to 30/9/15 1166 1.177 1.599

percent change 8.63 13.65 19.58

Renminbi change curve

6.05

6.1

6.15

6.2

6.25

6.3

6.35

6.4

6.45

2.8

2.9

3

3.1

3.2

3.3

3.4

3.5

3.6

3.7

CN

Y P

RIC

E

Ch

ina

10

yr &

5yr

Bo

nd

Yie

ld

China 10-Year Bond Yield China 5-Year Bond Yield CNY Price

Change analysis-CHINA

CHINA Exchange Rate 10 Yr 5 Yr

change from 1/8/15 to 13/8/15 0.19 0.06 0.07

percent change 3.05 1.71 2.32

change from 1/8/15 to 30/9/15 0.15 -0.22 -0.13

percent change 2.35 -6.28 -3.94

Russian change curve

0

10

20

30

40

50

60

70

80

9.5

10

10.5

11

11.5

12

12.5

RU

B P

RIC

E

Ru

ssia

10y

r B

on

d Y

ield

Russia 10-Year Bond Yield RUB Price

Change analysis -RUSSIA

RUSSIA Exchange Rate 10 Yr

change from 1/8/15 to 13/8/15 3.05 0.04

percent change 4.95 0.36

change from 1/8/15 to 30/9/15 3.83 0.25

percent change 6.21 2.26

South African Rand Change Curve

11

11.5

12

12.5

13

13.5

14

14.5

7.7

7.8

7.9

8

8.1

8.2

8.3

8.4

8.5

8.6

8.7

ZAR

PR

ICE

Sou

th A

fric

an 1

0yr

Bo

nd

Yie

ld

South Africa 10-Yr Bond Yield ZAR Price

Change Analysis – SOUTH AFRICA

SOUTH AFRICA Exchange Rate 10 Yr

change from 1/8/15 to 13/8/15 0.12 -0.09

percent change 0.98 -1.09

change from 1/8/15 to 30/9/15 1.19 0.34

percent change 9.40 4.06

Brazilian Real Change Curve

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

0

2

4

6

8

10

12

14

16

18

BR

L P

RIC

E

BR

AZI

L 1

0Y

R &

5Y

R B

ON

D Y

IELD

Brazil 10-Yr Bond Yield Brazil 5-Yr Bond Yield BRL Price

Change analysis- BRAZIL

BRAZIL Exchange Rate 10 Yr 5 Yr

change from 1/8/15 to 13/8/15 0.10 0.11 0.40

percent change 2.82 3.34 3.09

change from 1/8/15 to 30/9/15 0.64 0.61 2.96

percent change 18.58 18.29 22.53

Change analysis - India

India Exchange Rate Yield 10year Yield 5 year

Change from 1/8/2015 till 13/08/2015

1.07 7.8150—7.7450= -

0.07

7.9500-7.9250=-0.0250

Percentage Change 1.60 -0.09 0.09

Change from 1/8/2015 till 28/9/2015(prior to monetary policy review)

2.01 -0.10 -0.025

Percentage Change 3.14 -0.09 -0.032

Consolidated Analysis

Variation/Volatality percentage 1/8/2015 to 30/9/2015

Indonesia Brazil China Russia South Africa

INDIA

Exchange rate 8.63 18.58 2.35 6.21 9.40 3.14

5- Year Treasury Bill

19.58 22.53 -3.94 --NA NA -0.03

10 year treasury Bill

13.65 18.29 -6.28 2.26 4.06 -0.09

India period is between 1/8 till 28/9(Policy on 29/9)