IMF pushes China to disclose more currency data, WSJ reports

[WASHINGTON] The International Monetary Fund is pushing China to disclose data on holdings of derivatives that could shed light on more-opaque methods of intervention in the yuan's exchange rate, the Wall Street Journal reported on Monday.

The Washington-based lender is seeking data on the People's Bank of China's total holdings of forwards and futures, a step that would be in line with the nation's pledge last year to adhere to certain IMF disclosure standards amid efforts to win reserve-currency status for the yuan at the fund, the Journal said, citing unidentified people familiar with the matter. The IMF didn't immediately respond to a request for comment.

Analysts at firms including Goldman Sachs Group Inc have pointed to data in recent months showing a rise in holdings of forwards, suggesting it's part of a strategy to support the yuan without immediately draining China's foreign-exchange reserves. Daiwa Capital Markets analyst Kevin Lai said earlier this month that using forwards helps avoid steeper reserve drops that would risk causing "panic" in financial markets.

Many central banks around the world, including those in Thailand, Malaysia and India, have frequently disclosed such derivatives data to the IMF, the Journal reported.

China's foreign-exchange stockpile, the world's largest, shrank by US$28.6 billion last month to US$3.2 trillion, the smallest decline since June. That was lower than the US$40.9 billion decrease predicted in a Bloomberg survey of economists, and compares with December's record drop of US$108 billion as the monetary authority supported the yuan.

The PBOC launched a two-pronged attack on yuan speculators earlier this year, choking outflows from the mainland while mopping up the currency offshore. The nation's defense of the yuan depleted its foreign-exchange reserves by $513 billion last year, the first annual drop since 1992.

PBOC Governor Zhou Xiaochuan said at a conference on Sunday that he's targeting a yuan that's not "completely free floating" and that given the speed of the increase in capital inflows in the past, it's only natural that outflows should be quick as well.

BLOOMBERG