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Monday, December 7, 2015, 17:11

China's forex reserves fall in November

By Agencies

BEIJING - China's foreign exchange reserves, the world's largest, fell by US$87.2 billion in November to US$3.44 trillion, central bank data showed on Monday, indicating a pick-up in capital outflows that have put pressure on the central bank to support the yuan.

The fall in foreign exchange reserves was the biggest since a record monthly drop of US$93.9 billion in August, after a rise of US$11.4 billion in October.

"The pick-up in capital outflows appears to have been predominately driven by increased expectations for renminbi (yuan) depreciation" Julian Evans-Pritchard at Capital Economics said in a note.

"A rise in offshore interest rates due to the increased likelihood of a December Fed rate hike will also have added to outflow pressures."

The surprise depreciation of the yuan on Aug 11 fueled a wave of capital outflows on fears the world's second-largest economy might be slowing more sharply than thought, and on worries of a possible interest rate rise by the US Federal Reserve.

Such outflows eased briefly in October, helped by a rebound in the domestic stock market and the official crackdown on illegal foreign exchange transactions.

The value of China's gold reserves stood at US$59.52 billion at the end of November, down from US$63.26 billion at the end of October, the People's Bank of China (PBOC) said on its website.

China's International Monetary Fund (IMF) reserve position was at US$4.60 billion, down from US$4.64 billion the previous month. It held US$10.18 billion of IMF Special Drawing Rights at the end of last month, compared with US$10.36 billion at the end of October.

The central bank in July shifted to reporting its foreign exchange reserves on a monthly basis after adopting the IMF's Special Data Dissemination Standard (SDDS). The bank had previously released the data on a quarterly basis.

On Nov 30, the IMF admitted China's yuan into its benchmark currency basket, in a victory for Beijing's campaign for recognition as a global economic power, and the PBOC's vice governor Yi Gang said he expected the inclusion would make the yuan more stable.

China's foreign exchange reserves fell to US$3.44 trillion at the end of November, the central bank announced on Monday.

The reserves dropped by US$87.2 billion from October, according to the People's Bank of China.

The country's gold reserves decreased from US$63.3 billion at the end of October to US$59.5 billion at the end of November.

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