Michael Every, Head of Financial Markets Research at Rabobank, notes that China’s FX reserves number released on Sunday, saw a further drop of USD99.1bn to USD3,231bn. Key Quotes “On one hand this was slightly better than what the market had been expecting (-USD120bn). However, it is again unclear if this captures all of the actual decline in reserves that occurred, such as via forwards. Even more significantly, it underlines that despite the significant tightening of on the ground capital controls over the course of the month, as reported by various media sources, money continues to exit China. Indeed, even if USD99.1bn is the real number that trend is already sufficient to see reserves drop below the IMF’s ‘line in the sand’ of USD2.6 trillion by the summer; I suspect the de facto critical threshold is somewhat higher than that, bringing the potential deadline for a seismic shock to the markets proportionately even closer. In short, as previously noted, we are likely in for some serious Year of the Monkey business in 2016. (And that’s without including today’s news of a North Korean long-range missile launch.)” For more information, read our latest forex news.