Interesting reading from the FT’s Alphaville blog, which looks at research on Chinese US dollar flows/positioning.
It seems as though corporate China is selling renminbi and buying US dollars but due to political considerations, the central government is selling dollars to maintain a stable exchange rate.
The PBoC may be furiously intervening to prevent further renminbi weakness and further dollar shortages.
The undercurrent, however, is clear — US dollar demand.
