China's FX reserves declined further in September

Mmm cash. Photo: Breaking Bad / IMDB

China’s foreign exchange reserves continued to decline in September, falling by $43.3 billion to $3.514 trillion, according to data released by the PBOC today.

The figure, smaller than the $94 billion reduction reported in August, took the three month decline in the nation’s FX reserves to $180 billion according to analysis conducted by Westpac.

Following the decision by the PBOC to adopt a more market-orientated rate setting mechanism for the renminbi on August 11, something that saw the currency weaken by around 2% against the US dollar immediately following the announcement, the central bank has been actively defending the currency against further market losses, contributing to the decline in official reserves.

Reflective of the PBOC’s attempts to stymie speculation of further renminbi weakness, the currency strengthened 0.43% against the US dollar over the course of September.

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