21 Jan 2016
CNY: China’s reserve adequacy saw a sharp deterioration – BNPP
FXStreet (Delhi) – Research Team at BNP Paribas, notes that China’s reserve adequacy saw a sharp deterioration in 2015 and the trajectory remains downwards under the current rigid exchange rate framework.
Key Quotes
“The writing is on the walls. China's mighty stockpile looks less impressive when assessed against external liabilities and potential domestic capital flight. A similar story has played out in other emerging markets, which culminated in large, unplanned, currency devaluation. 2016 looks to be a year when the extent of Chinese exceptionalism will be severely tested.”
Key Quotes
“The writing is on the walls. China's mighty stockpile looks less impressive when assessed against external liabilities and potential domestic capital flight. A similar story has played out in other emerging markets, which culminated in large, unplanned, currency devaluation. 2016 looks to be a year when the extent of Chinese exceptionalism will be severely tested.”