Stabilization of China's Capital Outflows May Hinge on Janet Yellen
- Stable yuan has calmed a rush to get money out of China
- Outlook depends on what the Fed signals for U.S. rate hikes
Janet Yellen.
Photographer: Andrew Harrer/BloombergThis article is for subscribers only.
Whether China’s recent stabilization of its currency and capital outflows continues -- or downside pressure reignites -- may hinge in large part on Janet Yellen.
If the Federal Reserve chair sticks to a dovish script this week, there would be no obvious trigger for a greenback rally and resulting cue for Chinese companies and savers to squirrel money out of the nation. Any signal of an imminent interest-rate increase, and it’s a different story -- a U.S. dollar rally could suck money out of China, posing an added complication for the People’s Bank of China’s efforts to underpin economic growth.