1Q Balance of Payments: Stop the Bleeding

In 1Q 2017 the net deficit in the financial account and unexplained channels dropped to just $21.5 billion, signaling a pause to the period of dramatic capital outflows that started in 2Q 2014. As a result, China’s stated levels of FX reserves were nearly unchanged in 1Q 2017 after a mere $2.6 billion net sale. The stabilization of China’s external capital flows was a result of tighter capital controls as well as changing USD/CNY sentiment.

Posted August 1, 2017
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