Chinese Reserve Needs Higher Than Perceived

Bloomberg: When $3 Trillion Just Isn't Enough
The IMF has developed a suggested framework based upon research into previous currency crises. According to this formula, countries should maintain reserves equivalent to the sum of 30 percent of their short-term foreign-denominated debt, 15 percent of other portfolio liabilities, 10 percent of the M2 or broad money supply and 10 percent of yearly exports.

In China's case, that would add up to approximately $3 trillion.
The piece is by Christopher Balding.

He explains further and gives a deeper breakdown of the needs drawing on Chinese reserves in Follow Up to the Question of Chinese Foreign Exchange Reserves such as:
For 2016, we are already up to say $1.5-2 trillion is needed in 2016 for foreign currency needs. Between just paying bills and having liquidity to engage in international trade, China needs about $1.5-2 trillion in FX reserves. We could move it a little lower by taking on some more risk, but you can’t move it a lot lower without increasing your risk very very fast.

China's credit growth is what doomed the yuan. There are a lot of reserves, but credit growth far outstripped reserves. They should not have studied 1997 or 1989, but 1929.

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