Chinese Yuan

M

m22au

Various money managers have been publicly bearish on the CNY in recent weeks. This thread is for discussion of the multi-month and multi-year outlook for the currency.

First up, a discussion of Chinese FX reserves, previewing data to be released this weekend

"Markets Suffer as China Depletes Reserves"
http://www.barrons.com/articles/markets-suffer-as-china-depletes-reserves-1454736564

http://www.marketwatch.com/story/chinas-forex-reserves-poised-for-another-record-drop-2016-02-05

http://www.zerohedge.com/news/2016-02-04/event-could-unleash-vicious-bear-market-rally

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m22au said:
http://www.bloomberg.com/news/artic...gn-exchange-reserves-decline-to-3-23-trillion

The world’s largest currency hoard declined by $99.5 billion in January to $3.23 trillion, according to a People’s Bank of China statement released on Sunday. The drop was less than a Bloomberg survey’s median estimate of a $120 billion loss.

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More...

If the "magic number" of minimum FX reserves is $2.8 trillion,

http://www.barrons.com/articles/markets-suffer-as-china-depletes-reserves-1454736564
Title = "Markets Suffer as China Depletes Reserves"
"Street economists, along with the IMF, have written that $2.8 trillion is the lowest acceptable level for China’s forex reserves,"

then at a $99 billion per month depletion rate, it looks like China will breach this "limit" before 30 June.

Alternatively Kyle Bass suggests the "limit" is 2.7 trillion
http://www.cnbc.com/2016/02/03/kyle-bass-china-banks-months-away-from-danger-territory.html

which will be breached before 31 July at the $99.5 billion a month depletion rate.

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http://www.marketwatch.com/story/so...ning-through-its-currency-reserves-2016-02-04

SocGen: "China is burning through its foreign-currency reserves at such a blistering pace that the country will run down its cushion in a few months, forcing the government to wave the white flag and float the yuan, says Société Générale global strategist Albert Edwards."

Marketwatch on the Kyle Bass / David Faber interview on CNBC
http://www.marketwatch.com/story/ma...sis-is-betting-against-chinas-yuan-2016-02-03

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Alhambrapartners.com has a recent article , sorry cannot locate at this time, about PBOC use of swaps, currency futures and other exotics for maximum effect and minimum FX drawdown.
Implies that quaterly, (August,December, etc..) there may be uneven , amplified effects on reserves. It was a tough read for me so...
 
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