China: Reserves likely to register another sharp decline – SocGen

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 2, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Delhi) – Research Team at Societe Generale, suggests that China’s FX reserves are expected to have fallen further to $3,200bn at end-January from $3,330 at end-2015.

    Key Quotes

    “Changes in FX valuations in the first month of 2016 were likely negligible. Therefore, we estimate that the PBoC’s FX interventions over the month amounted to about $130bn, similar to in December.

    The PBoC allowed USD/CNY to slide at the beginning of the month but then had to intensify its interventions in light of elevated depreciation expectations. It is more than likely that the total amount of interventions, whether reflected in the reserve figure or not, was much higher than our forecast.”
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