China Sept forex reserves fall more than expected as PBOC steadies Yuan

by Jonathan Adams

China’s foreign exchange reserves fell for a third straight month in September and by slightly more than markets had expected, suggesting fresh capital outflows from the world’s second-largest economy.

Forex reserves fell nearly US$19 billion (£15.24 billion) to US$3.166 trillion (£2.54 trillion), from US$3.185 trillion (£2.56 trillion) in August, central bank data showed today.

Economists polled by Reuters had expected reserves to ease to US$3.18 trillion (£2.55 trillion), after dropping to the lowest since 2011 in August after the central bank intervened to support the Yuan currency as it weakened to near six-year lows.

China’s reserves, the largest in the world, fell by a record US$513 billion (£411.49 billion) last year after Beijing devalued the Yuan, sparking a flood of capital outflows that threatened to destabilise the economy and alarmed global financial markets.

But declines had slowed sharply in the first half of this year as authorities tightened capital controls and cracked down on forex trading which they suspected to be speculation.

Tentative signs of stabilisation in the economy and investment inflows were also believed to be offsetting outflow pressures.

However, while September’s US$18.8 billion (£15.09 billion) drop was modest compared with overall reserves, it was larger than a decline of US$15.89 billion (£12.75 billion) in August and the biggest in three months.

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Related News

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Know more