China controls capital outflow

Friday 8 March 2019

For now, via Capital Economics:

• The People’s Bank (PBOC) does not appear to have intervened substantially in FX markets in February, suggesting that the renminbi is not facing much downward pressure at present. However, with the economy likely to slow further in coming months and interest rates set to fall, the currency will probably come under renewed downward pressure later in 2019.

• The value of the PBOC’s reserves amounted to $3,090bn at the end of February, up $2bn from a month earlier. (See Chart 1.)

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.