China forex reserves fell to $3.65tn in July

Beijing, August 7

China’s foreign exchange reserves, the world’s largest, fell to $3.65 trillion at the end of July, the official news agency Xinhua reported today, adding that it was the third consecutive monthly decrease.

July’s fall amounted to $42.5 billion, it said, citing an announcement by People’s Bank of China (PBoC).

Today’s announcement was the first time the PBoC released monthly foreign reserve data, rather than quarterly, and marks the lowest figure since August 2013, Bloomberg News reported.

China’s central bank has adopted stricter reporting rules as part of its push to have the yuan added to International Monetary Fund (IMF)’s basket of reserve currencies at its next review, Bloomberg added.

IMF, however, said Tuesday that China still needs to do ‘significant work’ for yuan to be included in its basket of ‘special drawing rights’ (SDR) currencies.

China is seeking to expand the use of yuan, also known as renminbi, by having it included in the SDR, an international reserve asset that currently includes the US dollar, euro, British pound and Japanese yen.

The IMF executive board, which represents its 188 member nations, will make its final decision in November, a senior IMF official said on condition of anonymity.

July’s reserves fall ‘reflects central bank’s intervention in the market to keep the yuan stable, as well as the continued capital outflows’, Li Miaoxian, economist at Bocom International Holdings in Beijing, said.