China sees largest monthly fall in forex reserves

The People's Bank of China has sold US dollars to buy yuan amid a capital flight spurred by slowing growth in the country's economy.
The People's Bank of China has sold US dollars to buy yuan amid a capital flight spurred by slowing growth in the country's economy.PHOTO: REUTERS

BEIJING/KUALA LUMPUR • China's foreign exchange reserves, the world's largest, fell by US$107.9 billion (S$155 billion) in December to US$3.33 trillion, the biggest monthly drop on record, central bank data showed yesterday, according to figures released by the State Administration of Foreign Exchange.

The drop came as the People's Bank of China (PBoC) sold US dollars to buy yuan amid a capital flight spurred by slowing growth in the world's second largest economy.

The reserves fell US$512.66 billion last year, the biggest annual drop on record.

The value of its gold reserves stood at US$60.19 billion at the end of December, up from US$59.52 billion at the end of November, PBoC said on its website.

Gold reserves stood at 56.66 million fine troy ounces at the end of December, up from 56.05 million at end-November.

China's International Monetary Fund (IMF) reserve position was at US$4.55 billion, down from US$4.60 billion the previous month.

The central bank in July started reporting on reserves on a monthly basis after adopting the IMF's Special Data Dissemination Standard. The bank had previously released the data on a quarterly basis.

Hong Kong reserves stood at US$358.8 billion at the end of last month, its Monetary Authority said, up 0.8 per cent from US$355.8 billion at the end of November.

Meanwhile, foreign reserves of China's Asian neighbours Malaysia and the Philippines increased, official data showed.

Malaysian reserves rose above the US$95 billion mark for the first time since September after its central bank pledged to rebuild the holdings.

"The level of reserves during 2015 remained supported by the current-account surplus and inflows of foreign direct investment in an environment of reversal of flows," Bank Negara said.

The Philippine reserves increased nominally to US$80.61 billion due mainly to the government's net foreign currency deposits and the central bank's foreign exchange operations and income from investments abroad, the central bank said in a statement.

REUTERS, BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on January 08, 2016, with the headline 'China sees largest monthly fall in forex reserves'. Print Edition | Subscribe