China just can’t hold on to its money. A November jump in cash outflow to $113B—down from $37B in October—forced China’s government to prop up its currency, Capital Economics' China economist Julian Evans-Pritchard says.
The estimate comes from the $87B drop in China’s foreign-exchange reserves to $3.438T, their lowest level in two years, MarketWatch reports.
As the yuan falls and a Fed rate hike looms, Chinese investors switch their money to relatively safe US markets.
Still, Evans-Pritchard says China will keep the yuan strong going forward to encourage its international use (although a weaker yuan helps Chinese exports).
The IMF decided to include the yuan in its new Special Drawing Rights basket, a step towards more global Chinese influence. [MW]
