China's Forex Reserves Shrink As Country Tries To Hold Up Renmbini

Tom Burroughes

9 February 2016

China’s foreign exchange reserves have declined to their lowest level since 2012, highlighting how the Asian country's central bank has sold dollars in a bid to prevent a rapid depreciation in the renminbi, according to the South China Morning Post.

Reserves shrank by $99.5 billion in January to $3.23 trillion, according to a People’s Bank of China statement issued at the weekend when the markets were closed. The stockpile fell by more than $500 billion last year.

The reserves are being used because policymakers are trying to stem a rapid deceleration of the renminbi as the Chinese economy slows down.