1. Hello Guest Do you know binary.com offers exclusive $20 No Deposit Bonus for FX Binary Point visitors? Click here to sign up

China: Few months from running out of ‘spare’ FX reserves - SocGen

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 5, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Joined:
    Oct 7, 2015
    Messages:
    27,524
    Likes Received:
    0
    Albert Edwards, Research Analyst at Societe Generale, notes that China has burned through almost $800bn of its FX reserves mountain since it peaked at almost $4 trillion in mid-2014.

    Key Quotes

    “January’s FX data to be released this weekend is set to register another sharp drop of $120bn (consensus estimate). But at $3.2 trillion, the market remains content that massive firepower remains to support the renminbi. It does not.

    Our economists estimate that when FX reserves reach $2.8 trillion – which should only take a few more months at this rate – FX reserves will fall below the IMF’s recommended lower bound.

    If that occurs in the next few months, expect to see a tidal wave of speculative selling, forcing the PBoC to throw in the towel and let the market decide the level of the renminbi exchange rate.”
    For more information, read our latest forex news.
     

Share This Page