China: Slight ease in capital outflows as RMB-denominated ones ease further - Natixis

According to the analysts at Natixis, their Capital Flow Tracker for China shows a slight ease in capital outflows as it points to outflow of 188 USDbn in Q1 2017, based on January data which is slightly less than 202 USDbn in Q4 2016.

Key Quotes

“RMB outflows again much smaller than in previous months.”

“Outflows in RMB have made the way back, in contrast to December 2016, of which the RMB’s share is close to zero. However, the scale is still much smaller than the average of previous months.”

“Foreign currency outflows remain larger (88%). The share of RMB has been reduced to 12%, as opposed to 28% in Q4 2016.”

“Changes in foreign reserves and capital outflows:

• Only part of the outflows is reflected in a loss of foreign reserves.
• RMB denominated outflows are partially the reason as well as the large share on unrecorded outflows (especially cash outflows).”