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In October, the People’s Bank of China lost $ 33.93 billion, a record amount since the beginning of the year. The total amount of gold and foreign exchange reserves at its disposal fell to 3,053 trillion, which is the lowest level since April 2017.
The reduction in reserves is only half due to the revaluation of the assets in which they are invested. During the month, the dollar rose by 2.1% against a basket of 6 key world currencies, which brought the NBK about $ 20 billion in losses.
The remaining $ 14 billion. US Central Bank of China, in all likelihood, sold on the market, supporting the yuan, whose rate fell to a 10-year low against the backdrop of a trade war with the United States.
In September, the volume of interventions was higher - $ 17 billion.
The reduction of reserves is the reverse side of capital outflows, the ING economist ING Iris Pang states. Nevertheless, it’s too early to talk about panic, he stresses: in 2015, in the background of the collapse of the yuan, the NBK was losing reserves at a rate of $ 100 billion a month.
The People’s Bank, when needed, will use reserves to stabilize the RMB exchange rate, said the head of the central bank’s analysis and statistics department, Sheng Suncheng, in late October.