Info from Nomura's note comes via Bloomberg link here (may be gated).
Nomura also outline benefits of the People's Bank of China selling yuan:
- “First, it could prevent the yuan from appreciating further.
- Second, it could raise the PBOC’s FX reserves in a time of rising market fear of Chinese corporates’ offshore dollar bonds defaults.
- Third, it could add liquidity to the economy, which is slowing to a worrisome pace.”
And say this yuan selling policy is what they expect from the PBOC ahead.
- “We expect the net purchases of FX by the PBOC could increase significantly in the coming months,”
This chart is offshore yuan ... its much higher (against the AUS) since May of last year:
