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Has the RMB's Devaluation Ended?

03 Sep 2023

In the capital market, up until August 29th, the net outflow of northbound funds reached a total of 877 billion RMB over the preceding 20 trading days. Since 2019, there were merely five occasions where this net outflow surpassed 500 billion RMB within 20 days. These instances took place during April-May 2019, February-March 2020, July-August 2020, February-March 2022, and September-October 2022, with an average outflow of 907 billion during these periods. These intense, short-term outflows generally coincide with heightened geopolitical tensions, tighter overseas liquidity expectations, and escalating domestic and global economic challenges.

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