Via Capital Economics:
The PBOC appears to have intervened directly in the foreign exchange market again in October. But its intervention remains small in scale and seems calibrated to slow the renminbi’s fall rather than stop it. The value of China’s FX reserves amounted to $3,053bn at the end of October, down $34bn from a month earlier (the Bloomberg median was $3,059, our forecast was $3,040bn). (See Chart 1.)
We won’t know for sure how much of the decline was due to PBOC intervention until it publishes its balance sheet data later this month. But our model had suggested that movements in exchange rates and bond prices would drag down the value of the reserves by $20bn. This implies that the PBOC sold around US$14bn of FX last month, a similar scale to the US$17bn it sold in September. (See Chart 2.)
