China Forex Reserves Down $19b

China’s foreign exchange reserves fell for a third straight month in September and by slightly more than markets had expected, suggesting fresh capital outflows from the world’s second-largest economy, Reuters reported. Forex reserves fell nearly $19 billion to $3.166 trillion, from $3.185 trillion in August, central bank data showed on Friday. Economists polled by Reuters had expected reserves to ease to $3.18 trillion, after dropping to the lowest since 2011 in August after the central bank intervened to support the yuan currency as it weakened to near six-year lows. China’s reserves, the largest in the world, fell by a record $513 billion last year after Beijing devalued the yuan, sparking a flood of capital outflows that threatened to destabilize the economy and alarmed global financial markets. But declines had slowed sharply in the first half of this year as authorities tightened capital controls and cracked down on forex trading which they suspected to be speculation. Tentative signs of stabilization in the economy and investment inflows were also believed to be offsetting outflow pressures.