The rush to evacuate funds from China is accelerating forcing the cental bank to sell increasing amounts of its foreign exchange reserves to defend the yuan despite engineering the largest decline on record in 2016.
So far this year the yuan (CNY) has lost 7.2 percent against the dollar, continuing the steady and mounting devaluation that begain in 2014 at 2.5 percent, rose to 4.6 percent in 2015 and at the above mentioed rate this year. In the last three years the yuan has shed 14.9 percent of its dollar value, briginning it back to a pre-financial crash level of May 2008.
."A net $69.2 billion exited the nation in November, compared with a monthly pace of around $50 billion since June, Goldman economists led by Hong Kong-based MK Tang wrote in a note Friday" as reported by Bloomberg.
More than $1 trillion in foreign assest has left China since August 2015. There has been a steady outflow for 14 straight months. The PBOC's foreign exchange reserves dropped by $55 billion in November, the largest fall since January.
The People's Bank of China permits a 2 percent band on either side of the day's fixed rate in the onshore currency market in Shanghai.
Chief Market Strategist