Chinese US dollar reserves lower in August

The People's Republic of China's foreign exchange reserves dropped last month as the country moved to weaken its currency by selling US dollars.

The Asian giant's stockpile of greenbacks decreased by $93.9bn to $3.557trn in August, slightly more than economists had penciled in and the largest ever month-on-month decline.

China's reserves have more than tripled over the past decade - to become the third largest on the planet - as the country bought US currency in a bid to slow a strengthening yuan as its trade balance ballooned.

"Today’s data on China’s foreign exchange reserves suggest that the People’s Bank (PBOC) is not burning through its reserves as quickly as many had believed.

"[...] Indeed, some commentators had suggested the PBOC may have sold as much as $200bn which, if such rapid sales were sustained, would mean that China’s FX reserves would be depleted within a couple of years," Julian Evans-Pritchard, China economist at Capital Economics said.

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