Dollar Loan Prepayment May Be Fueling Reserve Drawdown

As part of an article on corporate USD debt, the EO says the prepayment of dollar debts could have fueled recent outflows:
Although only the case, but in the context of the RMB exchange rate stall, the market is reading a different kind of meaning. Dollar debt prepayment tide coming? Actually, this is one of the main reasons for the recent Chinese foreign exchange reserves shrink. "Prepayment indeed a great relationship with the exchange rate, if the dollar continues strong, the yuan continues to face pressure, this action needs to be done ahead of time, this year there are a large number can be paid in advance, appears the most in the real estate business," the North said a broker underwriting, abandon the dollar debt financing, and the election in the country to issue bonds, housing prices have become common practice ideas.
Explaining the rise of dollar borrowing:
Once upon a time, the continuous appreciation of the yuan against the US dollar to the Chinese enterprises to go abroad to finance a great opportunity to continue the devaluation of the dollar may even allow enterprises sitting on a low-cost financing opportunities, this situation attracts many Chinese companies into offshore the bond market.

Enter 2014, the amount of domestic enterprises to issue dollar bonds soared, according to data provided by Dealogic, in 2014, China offshore bond issuance amounted to 139.7 billion US dollars, of which, $ 104.7 billion of dollar-denominated bonds, accounting for 74.9%. And this force in enterprise bonds, not only in the domestic market financing more difficult real estate companies, including many Chinese business community, "leading backbone" China Metallurgical Group, Baosteel, the national grid and so have hundreds of millions of bonds scale. In 2015 dollar debt issuers among state-owned enterprises accounted for more than half.
EO: 人民币失速风口 中国企业美元债风险压顶

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