China’s foreign exchange reserves fell another $43bn last month, suggesting continued intervention in the forex markets to support the renminbi.
However, the pace of capital outflow slowed compared with August, when reserves fell $94bn, the sharpest monthly fall on record, as the People’s Bank of China sold down some of its formidable stockpile to support its currency after the August 11 devaluation.
“The figure shows capital outflow continued but more slowly than last month,” said Ding Shuang, head of greater China economic research at Standard Chartered. “The government is trying to reassure the market that a large-scale renminbi devaluation won’t happen not only through words but also by action. We expect the intervention will generally slow down in the following months.”