Volatile Yuan Puts Focus on China's Capital-Control Buffers
- China clamped down on outflows to stem record loss of reserves
- Overseas takeovers were curbed, regulatory scrutiny tightened
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The sharpest decline in China’s currency since policy makers devalued the yuan in 2015 has seen little of the capital-flight panic that gripped markets back then. How long the calm lasts depends in part on the effectiveness of controls put in place last time.
This time around, the yuan’s 3.6 percent slide since mid-June has been accompanied mainly by an outflow of cash from foreign, rather than domestic, investors, analysts say. Overseas funds took out almost 4 billion yuan ($610 million) from Hong Kong’s Stock Connect with mainland exchanges in that period, reversing inflows the prior two weeks.