Drop in China’s reserves suggests $34bn move to protect renminbi
The yuan fell 1.5% against the dollar in October, its seventh straight monthly loss
Beijing — China’s foreign exchange reserves fell more than expected to an 18-month low in October amid rising US trade frictions, suggesting authorities may be slowly stepping up interventions to keep the yuan from breaking through a key support level. Reserves fell by $33.93bn in October to $3.053-trillion, central bank data showed on Wednesday. The drop was the biggest monthly decline since December 2016, and compared with a fall of $22.69bn in September. Economists polled by Reuters had expected reserves to drop $27bn to $3.06-trillion. China’s foreign exchange regulator attributed the fall to adjustments in global asset prices and currency valuation effects caused by a 2.1% rise in the dollar index.
Net foreign exchange sales by China’s commercial banks are likely to be about $3bn in October, a drop of more than 80% from September, the State Administration of Foreign Exchange said in a statement. The yuan slipped closer to the psychologically important level of 7/$ in late...
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