China: Outflow pressure continued in November – Standard Chartered
Shuang Ding, chief economist at Standard Chartered, points out that that their monthly capital flows tracker for China, suggests capital outflows for a third consecutive month in November.
“The trade surplus widened to USD 44.8bn, more than offsetting the estimated service trade deficit of USD 23.6bn and net FDI outflows of USD 1.3bn. However, the People’s Bank of China’s (PBoC’s) FX assets declined USD 8.2bn, suggesting net FX selling by the central bank. We therefore estimate a marginal decline in non-FDI capital outflows to USD 28.1bn from USD 29.5bn in October.”
“Net FX sales by banks on behalf of clients registered the highest level since December 2016. The ratio of FX settlement to FX receipts fell below 60% for the first time in 10 months, indicating a fall in FX settlement willingness.”
“The Chinese yuan (CNY) weakened against the USD gradually in November. FX assets held by the PBoC fell by USD 8.2bn, smaller than the USD 13.2bn decline in October, suggesting less FX intervention.”