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9 Pages

Falling renminbi and reserves: what next for China?


Falling renminbi and reserves: what next for China?

Report summary

The Chinese policymakers did not see it coming. Market turbulence has ensued since the People's Bank of China announced its exchange rate reform on 11 August 2015. To date, the renminbi has fallen by nearly 5% against the US dollar. China's foreign exchange reserves, once thought to be a formidable war chest, shrank by US$420 billion in just six months to US$3.2 trillion by end-January. Accelerating capital outflow sparked concerns about a looming financial crisis. China now faces the classic trilemma – it cannot control its exchange rate, have an independent monetary policy and allow free capital movements all at the same time. The path to reform was never going to be easy. What can we expect from China's policymakers next, and will the renminbi devalue sharply again?

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  • Falling renminbi and reserves: what next for China? PDF - 718.35 KB 9 Pages, 0 Tables, 21 Figures

Description

This Macroeconomics and Global Trends Insight report presents our research on this key topic, and draws out the implications for economies and commodity markets.

This report delivers a clear understanding of our unique global economic outlook and identify risks and uncertainties to watch out for.

Wood Mackenzie's global trends and macroeconomic analysis underpins all our commodity demand analysis, ensuring we continually deliver an integrated and consistent view.

Our comprehensive understanding of commodity markets gives us a unique insight into the pace of global development and the risks associated with it.

  • Renminbi: What changed since 11 August
  • RMB under pressure: what's driving China's capital outflow?
  • Is China running out of reserves?
  • RMB outlook: expect volatility, pray for stability
  • Economic indicators

In this report there are 21 tables or charts, including:

  • Renminbi: What changed since 11 August
    • Renminbi Spot Exchange Rate (RMB/USD)
  • RMB under pressure: what's driving China's capital outflow?
  • Is China running out of reserves?
    • China's reserves are falling...
    • ...but current account surplus can help rebuild them
  • RMB outlook: expect volatility, pray for stability
    • Renminbi outlook to 2018
    • Renminbi exchange rate index: CFETS currency basket
  • Economic indicators
    • USA Purchasing Managers' Indices
    • Eurozone Purchasing Managers' Indices
    • Japan Purchasing Managers' Indices
    • China Purchasing Managers' Indices
    • Industrial production
    • Industrial production
    • Consumer Sentiment Index (3-month moving avg.)
    • Consumer Sentiment Index (3-month moving avg.)
    • 10-year government bond yields (%)
    • 10-year government bond yields (%)
    • Consumer Price Index (annual % change)
    • Consumer Price Index (annual % change)
    • Exchange Rate Indices vs US$ (Jan 2012 = 100)
    • Exchange Rate Indices vs US$ (Jan 2012 = 100)
    • Oil and gas prices
    • Copper and freight prices
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