People’s Daily recently reported that, according to data that China’s central bank released, China saw a US$93.9 billion decline in foreign exchange reserves in August. This is the largest one month decline in history. As of the end of August, China’s official foreign exchange reserve level was at US$3.557 trillion. China’s reserves reached their peak in June 2014. Since then, the number has declined by US$435.8 billion. According to government experts in the field, the key reasons for the decline were the recent U.S. dollar appreciation and China’s capital outflows. The exchange rate between the Chinese currency and the U.S. dollar has seen significant fluctuation recently. However some observers expressed the belief that the Chinese economy will not see a disastrous capital outflow if the currency depreciation level is controlled to be below five percent.
Source: People’s Daily, September 8, 2015