What Drove China’s Large Reserve Sales? (Brad Setser, CFR)

China never was going to transition from one of the most heavily managed currencies in the world to a free float overnight. The key question always has been how China is going to manage its currency, not whether China will manage its currency. The “market” in China has effectively been a bet on where the PBOC—and its various masters—wanted the currency to go. The reform last August did not change that

http://blogs.cfr.org/setser/2016/05/31/what-drove-chinas-large-reserve-sales/