BEIJING (REUTERS) - China's foreign exchange reserves fell the most in nine months in October and by far more than expected to the lowest since March 2011, indicating further capital outflows despite recent signs the world's second-largest economy is stabilising.
Reserves fell US$45.7 billion (S$63.1 billion) last month to US$3.121 trillion, the biggest monthly decline since January, compared with a near US$19 billion fall in September, central bank data showed on Monday. The October drop was the fourth in a row, and exceeded the previous three months combined.
Economists polled by Reuters had expected reserves to dip to US$3.14 trillion in October from US$3.166 trillion at the end of September, a five-year low.
The central bank is widely believed to have sold US dollars to support the yuan currency in October as it fell to six-year lows.
The People's Bank of China (PBOC) had sold a net 337.5 billion yuan (S$69.2 billion) worth of foreign exchange in September, as it sought to support the weakening yuan as outflows picked up.
China's reserves, the largest in the world, fell by a record US$513 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.
The yuan, also known as the renminbi, fell over 1.5 per cent against the dollar in October alone as the greenback rose broadly against major global currencies in anticipation of an interest rate hike by the Federal Reserve.
Currency strategists polled by Reuters expect the yuan to depreciate by nearly 2 per cent more in the next 12 months, to levels not seen since the global financial crisis.