China forex reserves down to $3.2 trillion in January

China’s foreign exchange reserves have fallen to their lowest level in more than 3 years, the central bank said Sunday, February 7, as Beijing sells dollars to stop the yuan from depreciating further. The world’s largest currency hoard shrank by $99.5 billion in January to some $3.2 trillion, the People’s Bank of China said on its website, the lowest since May 2012. Worries about China’s economy have pushed the yuan to a 5-year low. The country saw its first-ever annual decline in foreign exchange reserves last year as Beijing tried to prevent a more drastic devaluation. The PBoC is selling dollars to buy yuan amid a capital flight spurred by the slowing growth in the world’s second largest economy. But some analysts predict a more drastic weakening of the yuan this year and question China’s ability to continue rapidly shedding the reserves.

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