China’s foreign capital outflow quickened pace, as yuan suffers longest losing streak since 1994
- Overseas investors held 3.4 trillion yuan (US$468 billion) of bonds traded on China’s interbank market at the end of September, down from 3.48 trillion yuan in August
- On Monday, the onshore yuan weakened against the US dollar, leading to an eighth straight monthly decline in October after dropping by 2.43 per cent
Foreign investors cut their holdings of yuan-denominated bonds for a record eighth consecutive month in September amid a weaker yuan, which suffered its longest losing streak since 1994 in October, and a poor outlook for China’s economy.
Overseas investors held 3.4 trillion yuan (US$468 billion) worth of bonds traded on China’s interbank market at the end of September, down from 3.48 trillion yuan in August, according to data released at the end of last week by the People’s Bank of China’s (PBOC) Shanghai head office.
In September, foreign investors held a total of 2.29 trillion yuan worth of Chinese government bonds, down from 2.33 trillion yuan a month ago, according to PBOC data.
The US dollar’s strong rise on the back of aggressive US Federal Reserve monetary tightening and a slowing Chinese economy have added pressure on the yuan, which has lost more than 13 per cent against the US dollar so far this year.