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Wednesday, September 7, 2016, 19:11

China's forex reserves decline in August

By Xinhua
China's forex reserves decline in August
A Chinese bank worker counts a stack of US dollars together with stacks of 100 Chinese yuan notes at a bank in Hefei, east China's Anhui province on March 9, 2010. (Photo / AFP)

BEIJING - China's foreign exchange reserves continued to drop in August, as the yuan faces renewed pressure after the United States hinted that it might raise interest rates.

Forex reserves fell to US$3.185 trillion at the end of August, down from 3.201 trillion in July, the People's Bank of China (PBOC) said Wednesday. If denominated in Special Drawing Rights, reserve assets of the International Monetary Fund, reserves fell to 2.284 trillion.

It was a decline for the second month running and brought reserves to their lowest level since the end of 2011.

Due to concerns over a weak yuan and capital outflows, China's forex reserves have been in broad decline since last November, but returned to growth in March due to signs of stabilizing economy. In June, there was an unexpected rise of US$13.43 billion.

However, stronger market expectations for a US rate hike by the year's end have put the currency under pressure again.

The yuan exchange rate composite index, which measures the currency's strength against a basket of currencies including the US dollar, euro and Japanese yen, came in at 94.33 at the end of August, down 1.06 percent from a month earlier.

PBOC data also showed that the country's official gold reserves stood at US$77.18 billion, down from 78.89 billion in July.

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