Thursday, January 7, 2016 - 04:53

China PBOC Reports Record Monthly FX Reserves Drop In Dec

BEIJING (MNI) - China's foreign exchange reserves fell by $107.92 billion in December, the biggest monthly drop on record, data from the People's Bank of China released Thursday showed.

For the whole year of 2015, China's foreign exchange reserves were down by $512.66 billion, also the largest recorded annual decline.

The PBOC has been using its huge foreign exchange reserves for intervention in the foreign exchange market to defend the yuan's value since the effective devaluation on Aug 11 last year.

The forex reserves fell heavily, down by $93.9 billion in August, following by another $43.3 billion drop in September. There was a modest increase of $11.4 billion in October and a hefty decline of $87.2 billion in November.

There has been concerns that the PBOC's intervention in the interbank forex market could soon deplete the country's huge foreign exchange reserves, which stood at $3.33 trillion through the end of December.

While the PBOC is reducing its intervention in the forex market in the new year, traders still expect January to see another big drop in foreign exchange reserves, pressured by strong demand from Chinese individuals for overseas travel during the week-long Chinese New Year holiday.

The PBOC noted its gold reserves rose to 56.66 million ounces at the end of December, up from 56.05 million ounces at the end-November.

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[TOPICS: MMQPB$,M$A$$$,M$Q$$$]

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