"The recent flood of capital leaving China has been driven primarily by increased scepticism that the PBoC will hold to its pledge to keep the renminbi stable," said Mark Williams, chief Asia economist at Capital Economics.


"The PBoC has enough reserves to keep selling at December's rate until mid-2018 but it would presumably throw in the towel before they were all exhausted," said Mr Williams. "If investors think the PBoC may shift its stance in future, they have an incentive to sell renminbi assets now even if no policy change is currently being considered."


One increasingly popular option is capital controls. Such rules are effectively a ban on the pressure on your currency...

Deploying capital controls does not come without costs. Foreign investment can dry up, as money managers avoid putting their cash into an economy they might not be able to take it out of. They may even make a bad situation worse, encouraging investors to pull out their money, rather than risk facing a stricter capital controls regime in the future.

This has not stopped some emerging market governments from pressing ahead. India and Venezuela have already bitten the bullet, and some believe that China could be next.

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