ata from the People’s Bank of China (PBC), China’s central bank, showed that China’s foreign exchange reserves dropped to US$3166.4 billion in September, US$18.8 billion less than the figure for August, reaching the lowest point since December 2011.
The foreign exchange reserves dropped for three months in a row. Analysts attributed the fall in September to cross-border tourism by Chinese during the mid-autumn festival and the National Day holidays, raising the demand for foreign currencies. Meanwhile, the appreciation of the US dollar also pushed the PBC to stabilize the yuan by selling some of its US dollar reserves.
But given China’s increasingly stable economy and the yuan’s entry to the IMF reserve currency basket of Special Drawing Rights, many analysts remained optimistic, arguing that neither China’s currency nor its reserves will plunge.