China's foreign exchange reserves fell by a record $93.9 billion last month, the government said Monday, as Beijing sold dollars to support its own currency following jitters over a sudden devaluation. The currency hoard declined by $93.9 billion to reach $3.56 trillion at the end of August, the State Administration of Foreign Exchange (SAFE) said on its website, showing the cost of China's efforts to prop up the yuan.
The fall was larger than expected, with a Bloomberg News survey of economists giving a median forecast for the reserves of $3.58 trillion. August was the fourth consecutive month reserves fell, according to SAFE data, and their lowest level since August 2013. In previous years China's government bought dollars to slow the appreciation of yuan.
But the foreign currency reserves remain by far the world's largest. China lowered the yuan's central rate against the US dollar by five percent in a week last month, a move which added to turmoil in global markets where traders worried the move signalled weakness in China's economy, a key driver of world growth. Policy makers then changed tack, seeking to stabilise the currency. "If the central bank continues its intervention, China's foreign exchange reserves will continue to shrink - the heavier the intervention, the deeper the fall," Li Miaoxian, a Beijing-based analyst at Bocom International Holdings told Bloomberg.