1/5
According to a former Chinese regulator, "Fed tightening is expected to reduce foreign capital inflows into China, shrinking the country's trade surplus and thus helping stabilise the yuan."
reuters.com/markets/curren…
According to a former Chinese regulator, "Fed tightening is expected to reduce foreign capital inflows into China, shrinking the country's trade surplus and thus helping stabilise the yuan."
reuters.com/markets/curren…
2/5
I think he's partly right. The PBoC has been worried about excessive inflows through the trade and financial accounts, and a narrower spread US-China interest rate spread should partially relieve the pressure on the financial account (not, however, the trade account).
I think he's partly right. The PBoC has been worried about excessive inflows through the trade and financial accounts, and a narrower spread US-China interest rate spread should partially relieve the pressure on the financial account (not, however, the trade account).
3/5
Already in January net foreign purchases of Chinese government bonds were RMB 70 billion, versus RMB 79 billion in December and RMB 80 billion yuan in November. Total foreign holdings of Chinese bonds last month added up to RMB 4.07 trillion.
Already in January net foreign purchases of Chinese government bonds were RMB 70 billion, versus RMB 79 billion in December and RMB 80 billion yuan in November. Total foreign holdings of Chinese bonds last month added up to RMB 4.07 trillion.
4/5
I estimate total foreign holding of inshore stocks and bonds to be a little over ! trillion. With $3.2 trillion of direct reserves and roughly $1 trillion of indirect reserves, I think the PBoC can still easily manage outflows, but another several months of high...
I estimate total foreign holding of inshore stocks and bonds to be a little over ! trillion. With $3.2 trillion of direct reserves and roughly $1 trillion of indirect reserves, I think the PBoC can still easily manage outflows, but another several months of high...
5/5
inflows and it will become increasingly difficult for China to avoid the classic developing-country balance-sheet risk. I think that's what the PBoC is most worried about, and why for now they see Fed tightening with relative equanimity.
inflows and it will become increasingly difficult for China to avoid the classic developing-country balance-sheet risk. I think that's what the PBoC is most worried about, and why for now they see Fed tightening with relative equanimity.
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