Currency outflows from China may be far bigger than previously thought, according to investment bank Goldman Sachs.
Bloomberg had previously estimated that a net $550 billion had left China between January and August. But that figure only counts funds that are converted from yuan to U.S. dollars within China and then moved out of the country. According to Goldman Sachs, savers often move yuan out of the country and then convert them to dollars in offshore markets.
Those transactions haven’t been included in counts of Chinese currency outflows. Goldman Sachs estimates that these offshore deals accounted for 56 and 87 percent of all outflows in July and August.
Selling yuan in offshore markets puts downward pressure on its exchange rate. The currency has depreciated 3.3 percent against the dollar this year.