China's October forex sales at $39.2 billion, easing from September

China's central bank sold a net $39.2 billion worth of foreign exchange in October, data showed on Monday, easing from an eight-month high hit in September but still indicating continued official interventions to support the yuan. Net foreign exchange sales by the People's Bank of China (PBOC) amounted to 267.9 billion yuan ($39.2 billion), according to Reuters calculations based on central bank data released on its website. That compared with net sales of 337.5 billion yuan in September.
Earlier data showed China's foreign exchange reserves fell $45.7 billion in October to $3.121 trillion, the biggest monthly decline since January. That indicated further capital outflows despite recent signs that the world's second-largest economy is stabilizing.
The central bank is widely believed to have sold US dollars to cushion the descent of the yuan currency in October, when it fell to six-year lows. Beijing also has been trying to stem the flow of capital abroad with a string of measures aimed at closing loopholes and clamping down on illegal transfers.
Growing expectations that the US Federal Reserve will raise interest rates in December boosted the dollar by about 3 percent versus major currencies in October, weighing on the yuan. Persistent capital outflows could increase pressure on the PBOC to cut banks' reserve requirement ratio (RRR), but analysts believe the central bank is trying to use other policy tools, such as the medium-term lending facility and standing lending facility, to inject cash into the banking system.