China’s fx settlement data (sales of fx through both the PBOC and the state banks) provides the strongest confirmation of intervention in September to date — net sales of around $20b, $30b after adjusting for forwards.
Still manageable pressure of course for a country with over $3 trillion in reserves and a net foreign asset position of $1 trillion in the state banks. September sales offset some purchases in q1, and brought the trailing 12ms into balance.
And as expected all the net sales came from the state banks — PBOC formally added to its reserves, but there was a large drop in the net foreign asset position of the state banks.
So a rare Chinese data point that maps to expectations and the market reporting of state bank activity to support the CNY at 7.3
Source Credits: Mr. Brad Setser, X,