World Economy

Record China Capital Flight

Record China Capital Flight Record China Capital Flight

China’s capital outflow hit a record $141.66 billion in August as a result of the country’s biggest currency devaluation since 1994, according to data compiled by Bloomberg. The pullout of money from the country exceeded the previous record of $124.62 billion in July, Bloomberg’s so-called “hot money” gauge showed. It is an estimate of the sum of foreign exchange purchases by banks and the change in foreign exchange deposits to measure flows into and out of the country. The outflow accelerated in August following China’s shock devaluation of the yuan. The Central Bank of China has cut its daily reference rate by 1.9%, its biggest downward adjustment in 20 years. The aim, it said, was to revive faltering exports. Beijing has ramped up efforts to support the slowing economy and an almost 40% stock market drop since late June. The government cut interest rates for the fifth time since November and pledged to support the market by buying shares.