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The Continuous Drop of China’s Foreign Exchange Reserves Demonstrates Intense Capital Outflow

On October 7, 2015, FX678.COM, a Forex & Gold media in China, published an article titled, “Foreign Exchange Reserves Data Demonstrates Intense Capital Outflow; Chinese Yuan (Renminbi) Faces the Risk of Further Depreciation.”

China’s foreign exchange reserves dropped US$43.26 billion in September 2015 after a record drop of US$93.93 billion in August. The continuous decline in the foreign exchange reserves indicates that depositors are worried about China’s economy. As a result, capital outflow from China has accelerated.  

“The more we want to protect the renminbi and cut interest rates, the more we stimulate depositors to transfer their assets abroad by selling renminbi. Devaluation of the renminbi will not only lead to inflation, but also increase the prices of the commodities that China exports."

Source: FX678.COM, October 7, 2015