Moment of truth for PBoC’s reserve sales

China's foreign exchange reserves declined by $50bn in July and reached to $3.65trn. 

"The country's foreign exchange expected to drop by  $150bn in August. However, the possible range for the decline in reserves could be quite wide, from $100bn-$200bn. Given there was a small positive valuation effect of around $15-20bn from the rally in the EUR and JPY in August, the amount of official reserves sold by the PBoC to defend the RMB is in the range of $115-320bn. We estimate the current surplus in August at c.$40bn-60bn and so total capital outflows for August could be $255-280bn, up significantly from the $40bn per month in H1", estimates Societe Generale.