FXStreet (Guatemala) – Analysts at Nomura explained that China’s headline FX reserves fell by a more-than-expected USD107.9bn in December despite a larger trade surplus.
Key Quotes:
“Our FX strategy team believes concerns about capital flight from China are likely to remain. If this is the case, we judge that import growth in the coming months may continue to be pushed higher than it would normally (and truly) be.
Overall, we maintain our view that China’s economy is stabilising, albeit at a low level in the very near term. We continue to expect GDP growth to moderate to 6.4% y-o-y in Q4 from 6.9% in Q3, with risks to the upside.”
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