, 3 tweets, 2 min read
While I've no doubt that flight capital outflows were high this years (as evidenced mainly by the record outflows on the "Net errors and omissions" account, as I discussed in a September 30 tweet) I strongly disagree that these outflows...
scmp.com/economy/china-… via @scmpnews
@SCMPNews ...are what caused the RMB to weaken. The RMB's exchange rate is determined by the PBoC, not by market pressures, and the PBoC still has more than enough reserves to manage the currency. The PBoC won't devalue the RMB in response to outflows because weakness in the RMB more...
@SCMPNews ...likely to increase outflows rather than reduce them. What is more, RMB devaluations tended to reflect stages in the trade negotiations, suggesting that they have more to do with signaling than with market pressures.
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