Goldman sees significant jump in China June capital outflows
Baku, July 22, AZERTAC
China's weakening currency has triggered an increase in the amount of cash leaving the country, according to analysis by Goldman Sachs Group Inc, according to Bloomberg.
The U.S. bank estimates $49 billion worth of foreign-exchange outflows in June, compared with $25 billion in May. Goldman's analysis came after China's top currency regulator released data showing sustained demand for foreign-exchange. The yuan fell 1.1 percent against the dollar and 2.2 percent versus a trade-weighted index last month.
"While this is still well below the pace of foreign-exchange outflow in December and January, where our measure of FX outflow was about $126 billion per month, it suggests that the depreciation" of the yuan affected sentiment, economists led by Hong Kong-based MK Tang wrote in a note.
The nation experienced a record flood of capital outflows in 2015 and early this year after authorities allowed the exchange rate to weaken, prompting companies to pay down foreign debt and investors to move money overseas. The flows subsided as the yuan's declines slowed and authorities enforced strict cross-border capital controls.
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