What could be a reasonable estimate of true current Foreign Exchange Reserves ? And how much they spend a month defending the rmb ? Old articles but interesting reads...
https://www.forbes.com/sites/gordon...g-its-foreign-exchange-reserves/#5e9286e063e3
https://www.forbes.com/sites/kenrap...as-central-bank-is-losing-money/#5a0af3ca7e1f
The People’s Bank of China, the central bank, reported that Beijing’s foreign exchange reserves rose $11.4 billion last month. The increase marked the end of five months of consecutive declines.
The addition to the reserves, after months of record capital outflows, took the financial community by surprise.
As the Wall Street Journal notes, “reserves are a proxy for capital inflows and outflows.” During the month, net capital flow, as calculated by Bloomberg, was $62 billion outbound. Even though Bloomberg counts money left by Chinese parties in dollars as outflow, it is nonetheless not possible to reconcile its figure with the reported increase in reserves.
More technically, changes in the reserves over time have tracked the foreign currency position of banks. As Bloomberg reports, “policymakers buy or sell reserves to partially offset capital flowing in and out of the nation.”
Here, Beijing’s official reporting becomes “mysterious,” as a leading American academic told me last week. The State Administration of Foreign Exchange, the central bank unit administering the reserves, reported that Chinese banks in October sold a net 190.9 billion yuan ($30.0 billion) of foreign exchange for clients. That number should more or less match the change in reserves for the month, but there is a $41.4 billion discrepancy that is, on its face, inexplicable.
https://www.forbes.com/sites/gordon...g-its-foreign-exchange-reserves/#5e9286e063e3
https://www.forbes.com/sites/kenrap...as-central-bank-is-losing-money/#5a0af3ca7e1f
The People’s Bank of China, the central bank, reported that Beijing’s foreign exchange reserves rose $11.4 billion last month. The increase marked the end of five months of consecutive declines.
The addition to the reserves, after months of record capital outflows, took the financial community by surprise.
As the Wall Street Journal notes, “reserves are a proxy for capital inflows and outflows.” During the month, net capital flow, as calculated by Bloomberg, was $62 billion outbound. Even though Bloomberg counts money left by Chinese parties in dollars as outflow, it is nonetheless not possible to reconcile its figure with the reported increase in reserves.
More technically, changes in the reserves over time have tracked the foreign currency position of banks. As Bloomberg reports, “policymakers buy or sell reserves to partially offset capital flowing in and out of the nation.”
Here, Beijing’s official reporting becomes “mysterious,” as a leading American academic told me last week. The State Administration of Foreign Exchange, the central bank unit administering the reserves, reported that Chinese banks in October sold a net 190.9 billion yuan ($30.0 billion) of foreign exchange for clients. That number should more or less match the change in reserves for the month, but there is a $41.4 billion discrepancy that is, on its face, inexplicable.