By and large, the market is used to China fiddling with its economic numbers, or making them up completely, like GDP figures.
The market, however, mostly believed the figures on foreign exchange reserves as well as capital flows released by the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE). At least until now.
According to the South China Morning Post, the PBOC removed a key number about foreign exchange transactions in the banking system for January 2016. The report in question is titled “Sources and Uses of Credit Funds of Financial Institutions.”
The January report only includes foreign exchange transactions by the central bank and excludes the remainder of the banking system. It also merged another item related to foreign exchange transactions of banks and the central bank into an “other” category, making it harder to distinguish economic actors.
Not the First Time
This change in methodology comes at a crucial time for China, which is bleeding foreign exchange reserves, and foreigners as well as citizens are pulling out capital in record amounts.
Foreign exchange reserves at the central bank level decreased by $99 billion, and the Institute of International Finance (IIF) estimates as much as $113 billion in capital left the country in January.
