CNY: China’s fx reserves hit by triple whammy - ANZ

Analysts at ANZ published a latest report on the outlook for October’s Chinese fx reserves, noting that the country’s fx reserves are expected fall more-than expectations.

Key Quotes:

“China’s FX reserves for October is likely to post a much bigger decline than what the market is expecting.”

“The drawdown in reserves in the month will be driven by FX intervention, negative currency valuation effects, and capital loss on fixed income investments.”

“Should we see a resumption of USD strength following the US election, further declines in China’s FX reserves look likely as the authorities continue to maintain stability in the RMB Index.”