Russia Shows Why China Should Just Stop Burning Up Its Reserves
- Commerzbank says Russia, Brazil show intervention is futile
- Ruble slid 2013-2015 as Moscow drew down a third of its hoard
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China has wiped out about a quarter of the world’s heftiest foreign-currency stockpile over the past 18 months in its quest to keep the yuan stable. According to Commerzbank AG, such intervention is futile.
Data Tuesday showed China’s foreign reserves slipped below $3 trillion in January, the first time they’ve breached that psychologically potent level in almost six years. Yet the experiences of some fellow BRICs show that drawing down the stockpile will probably have little effect on the currency’s long-term fate, Hao Zhou, Commerzbank’s Singapore-based senior emerging-markets economist, wrote in a research note late Tuesday.