11219
China Capital Flows to Remain Volatile
World Economy

China Capital Flows to Remain Volatile

China expects its cross-border capital flows to remain volatile this year after outflows accelerated in the fourth quarter of 2014, the country’s forex regulator said on Sunday.
China’s capital and financial account recorded a deficit of $91.2 billion in the last three months of the year, the State Administration of Foreign Exchange (SAFE) said in a report on Sunday, up from $9 billion in the third quarter, Reuters reported.
Local residents and firms were increasingly switching to US-dollar assets, fuelling the outflows, it said.
“Even though China continues to have a large trade surplus and the yuan’s interest rate remains above that of other currencies, increasingly diverse and complex factors may cause greater volatility in the country’s cross-border capital flows,” it said.
It also said that the yuan’s exchange rate may remain fixed in the short term as an emergency measure to deal with internal and external shocks, but that the rate needed to change in the long-term to prevent imbalance and distortions in the economy.
SAFE said last month that it is closely monitoring cross-border capital flows.
Some analysts are worried that intensifying capital outflows have tightened liquidity conditions, threatening to brake the already slowing economy, and could prompt the central bank to loosen monetary policy further.

Short URL : http://goo.gl/f6FQGI

You can also read ...

All three sides can’t agree on a few key issues.  Top of the list: The manufacturing of cars.
No meaningful progress is being made in NAFTA trade talks...
IMF Cautions Kenya on Rising Debt
The International Monetary Fund has cautioned that Kenya’s...
The rules say that EU countries should have budget deficits below 3% of GDP and public debt below 60% of GDP.
National budgets of six eurozone countries may break the...
AT&T-Time Warner Merger Case Politically Motivated
The US Justice Department’s lawsuit to block AT&T’s $85...
Gold Inches Up as Dollar Dips
Gold prices crept up on Wednesday amid a softer dollar, with...
Credit Tightening Dominoes Threaten Asia With Hidden Risks
With Asia’s economies humming along, consumer prices rising...
Mexico Boosts Minimum Wage
The bittersweet news for Mexico’s poorest workers: the...
UK Slashes Growth Projections
Britain slashed its official projections for economic growth...

Trending

Googleplus