China’s foreign exchange reserves fell by nearly $70bn last month as the country’s central bank burned through more of its war chest in the fight to defend the renminbi from greater depreciation on the back of accelerating capital outflows.
Reserves at the People’s Bank of China fell $69.1bn to $3.051tn in November, a decline of 2.2 per cent from the previous month and the largest drop since January’s fall of 3 per cent. A median forecast from economists had predicted a fall of only 1.9 per cent from October.
The fifth consecutive monthly fall indicates growing difficulty for policymakers. Since the renminbi’s sharp depreciation in August 2015, Beijing has sought to combat more severe softening against the greenback by selling dollars from the central bank’s foreign exchange reserves.