China Macroeconomics & Academia

Christopher Balding

Macroeconomics

<p>There is increasingly strong evidence the PBOC is massaging official FX reserves data. The sustained period of net outflows during which PBOC FX reserves <em>increased</em> and the correlation between USD and RMB denominated reserves seemingly independent of the USDCNY exchange rate.  While these events may happen for short periods of time, given the length of times under discussion, it seems increasingly likely there are non-standard factors at play here designed to stabilize reserves.</p>

There is increasingly strong evidence the PBOC is massaging official FX reserves data. The sustained period of net outflows during which PBOC FX reserves increased and the correlation between USD and RMB denominated reserves seemingly independent of the USDCNY exchange rate.  While these events may happen for short periods of time, given the length of times under discussion, it seems increasingly likely there are non-standard factors at play here designed to stabilize reserves.

How Reliable Are PBOC FX Numbers?