,"name":"Comment","item":{"@type":"Thing","@id":"https://www.thestandard.com.hk/comment"}}]}]17:T6c6,

China saw the largest monthly capital outflow in more than seven years last month, piling extra pressure on the yuan, according to Goldman Sachs.

Net outflows climbed to around US$75 billion (HK$586 billion) in September, the most since late 2016 and an almost 80 percent increase from August, the firm said in a report.

China's currency regulator - the State Administration of Foreign Exchange - said Friday that onshore banks sold a net US$19.4 billion of foreign currencies to their clients last month, the most since November 2018, the height of the US-China trade war.

Banks also sent a net US$53.9 billion overseas on behalf of their customers, the biggest monthly outflow since January 2016, shortly after policymakers engineered a depreciation of the currency in August 2015.

The outflows are placing downward pressure on the yuan, which has weakened this month in both offshore and onshore trading. The currency closed flat yesterday and is less than 1 percent away from this year's lows reached in early September.

"The unfavorable interest-rate spread between China and the US will likely imply persistent depreciation and outflow pressures in coming months," Goldman analysts wrote in the note.

However, Goldman said it is sticking to its year-end yuan forecast of 7.3 per US dollar, saying that "policymakers appear to put more weight on confidence and stability in FX management."

China sees largest capital outflow since 2016