Tuesday, August 7, 2018

Changes in China’s FX regime have been associated with capital outflows, notably the 2014 band widening and the “step” devaluation in August 2015. The recent sharp devaluation of the RMB is arguably another regime change, that carries the risk of destabilizing expectations and reigniting capital outflows. Several considerations suggest capital outflows could be more muted this time, but the scale and speed of the recent RMB devaluation argues for caution.

IIF Authors

Robin Brooks

Robin
Brooks
Managing Director and Chief Economist
@RobinBrooksIIF
rbrooks@iif.com

Gene Ma

Gene
Ma
Head of China Research
202-857-3305
gma@iif.com

Gregory Basile

Gregory
Basile
Senior Research Analyst
@GregBasileIIF
gbasile@iif.com

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