China Just Blew Through A Quarter Of Its Foreign Currency Reserves

We seem to have yet again an acceleration in the outflow of Chinese capital, putting huge pressure on the yuan, the forex reserves, as well as the authorities.

These reserves decreased in November by a whopping $69.1 billion, to $3.05 trillion. This is down a whopping $1 trillion from its peak in 2014.

Up to half of the November decline could have been the result of the rise of the dollar, which reduces the value of the non-dollar forex reserves, and capital losses on fixed income instruments.

The picture is even worse if one considers net reserves (gross reserves minus foreign debt) which now stand at just $1.7 trillion.

They spend these reserves on defending the yuan, which has kept on sliding lower nevertheless. The losses are even more remarkable given China's still sizable current account surplus.

Somebody should tell the incoming US government, because President elect Trump was tweeting against China's currency policy only a few days ago. There is actually additional pressure from the rising dollar, anticipating Fed interest rate hikes and a reflationary policy package of the incoming US government.

China fixes its currency to a basket of 13 trade-weighted currencies, and the rising dollar means that the yuan gradually depreciates against the US dollar automatically when the dollar rises against these other currencies (like euro, yen, Swiss frank, a couple of Asian currencies like the Hong Kong dollar, the Thai baht, etc.).

Read more: http://seekingalpha.com/article/4029095-ch...rrency-reserves

Make usd great again

at least they got USD 1 Trillion to blow. we leh

soros made so much so much

we got rm399 bil in forex reserves.. iirc..

er, meaning we are good? or bad?

China currency drop. Malaysia also will drop to stay competitive against china. All racing to be millionaire like zimbabwe.

dont knw.. but convert to usd.. not much also.. in forex reserves..

USD is getting stronger since Trump won the election.

bad. our forex reserve is considered low and not enough to sustain for long.

but their november growth was better, ini news channel tak boleh pakai

if china bankrup.me don't care.

1 trillion a lot of money to burn just for defending your currency
But they deserve it as they artificially keep their currency logically low for decades to make their product cheap in world market esp compared to US

u better care. Ringgit will be heavily affected too. in fact, it's the entire Asia.

or you can stay in your gua and be a good budak gua

I thought Pres. Trump said China is keeping Yuan artificially low.
I'm konpuis now. Is China manipulating Yuan to be low or high?

no need.i will retire from business anytime.my saving already enough.

well i hope you park your savings in other currency rather than RM..

because sooner or later we will have to spend RM20 for a box of mixed rice...

u know the big "bullies" of the world...

europe, us and neighbor countries....

it is meant to suppress one overgrown giant....

China just has a lot of diplomacy challenges..... aside throwing money to make some....

its called competition. they are not there to do charity. they are looking for money and power.
u cant expect Tongkat like bRim when u go international.

Yeah, it's coming.