Currency Carry Trade by Trucks

Liu, Xuepeng; Tang, Heiwai; Wang, Zhi; Wei, Shang Jin

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Currency Carry Trade by Trucks

Date

2023

Authors

Abstract

With capital controls, the standard financial market transactions needed for currency carry trade are hard to implement. Using detailed trade data reported by both the mainland Chinese and Hong Kong's governments, we present evidence that indirect currency carry trade likely takes place via round-trip reimports. We also show that greater state control in terms of more state-owned firms does not reduce such “carry trade by trucks.”