The International Monetary Fund is pressing China to disclose more data on its holdings of derivatives such as forwards that have become the financial instrument of choice for the People’s Bank of China in its currency interventions as it fights to prop up the yuan’s value, The Wall Street Journal reported, citing unnamed sources. “The use of forwards can help tame depreciation expectations” for the yuan, said Zhou Ping, chief investment officer at asset manager Binyuan Capital. “But that also makes it more difficult to gauge the true scale of capital outflows and the drawdown of the foreign-exchange reserves for the purpose of currency intervention.”
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