China's forex reserves fall $16 billions

China's forex reserves fall $16 billions

BEIJING (APP) - China's foreign exchange reserves fell by some $16 billion dollars in August, officials said Wednesday, as the country's central bank sold dollars to defend its currency against capital outflows.

The world's largest currency hoard fell to just under $3.19 trillion, the People's Bank of China (PBOC) said on its website.

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Analysts said the fall indicated China is selling foreign exchange to buy its currency the yuan amid capital flight spurred by the slowing growth in the world's second largest economy.

The fall was larger than July's decline of $2 billion and bought China's reserves to their lowest level since late 2011, the official Xinhua news agency said.

"Although concerns about China are no longer front page news, capital outflow pressures haven't gone away," research firm Capital Economics said in a note on the figures.

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"We expect the PBOC to respond to continued outflow pressures by allowing further gradual renminbi depreciation," it added.

China's total forex reserves peaked at $4 trillion in 2014. But the country's growth has slowed since then, putting pressure on the yuan to depreciate.