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  • Editor’s Picks / Friday at 12:31 GMT

    When $3 trillion is not enough

    Bloomberg
    With $3.3 trillion in FX reserves, China is believed to have the firepower to defend the yuan, recapitalise its banks or spread cheap loans abroad to gain influence. "Such confidence, however, may be misplaced," said Bloomberg View contributor Christopher Balding. Close to a third of China's reserves, Balding said, are estimated to be held in illiquid assets, such as long-term investments in infrastructure projects, so they are not immediately available to the central bank. The FX reserves currently stand at about 110% of the IMF's recommended number, but excluding the illiquid reserves, China's holds only 93% of the total suggested as prudent, Balding said. Moreover, official FX reserves held by the People's Bank of China have dropped by $100 billion per month since October as Chinese citizens and firms scramble to move money out of the country, he said. "Beijing could be looking at a worryingly low level of reserves as soon as July." Fresh FX reserves figures are due this weekend.
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  • Article / 18 January 2016 at 11:00 GMT

    Moscow's FX fire sale propping up reluctant rouble

    Russia oil and gas expert
    United Kingdom
    Moscow's FX fire sale propping up reluctant rouble
    The central bank of Russia executed a bit of a high-wire act in December. It sold $9.4 billion of its FX reserves to cover the budget deficit but managed to keep the headline total of FX reserves virtually unchanged. The fine balancing act might have supported the rouble late last year and might continue doing so into the first months of the new one.
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    18 January
    Martin O'Rourke Martin O'Rourke
    USDRUB is at 76.6454 at 1104 GMT.
    18 January
    Martin O'Rourke Martin O'Rourke
    USDRUB is shifting rather rapidly towards 80.00. The pair is at 79.0650 at 1303 GMT.