China's forex reserves fell to 6-year low

China's foreign exchange reserves, largest in the world, fell for the second consecutive month to USD 3.185 trillion in August, the lowest in six years as the yuan faced renewed pressure after the US hinted it might raise interest rates, officials said today.
China's foreign exchange reserves, which are the largest foreign exchange in the world, fell to USD 3.185 trillion in August from USD 3.201 trillion in July, the People's Bank of China (PBOC) said.
If denominated in Special Drawing Rights, reserve assets of the International Monetary Fund, reserves fell to USD 2.284 trillion, state-run Xinhua news agency reported.

It was a decline for the second month running and brought reserves to their lowest level since the end of 2011.
Due to concerns over a weak yuan and capital outflows, China's forex reserves have been in broad decline since last November, but returned to growth in March due to signs of stabilising economy, the report said.
In June, there was an unexpected rise of USD 13.43 billion but fell by USD 16 billion in August.

However, stronger market expectations for a US rate hike by the year's end have put the currency under pressure again, the report said.
The yuan exchange rate composite index, which measures the currency's strength against a basket of currencies including the US dollar, euro and Japanese yen, came in at 94.33 at the end of August, down 1.06 per cent from a month earlier.

PBOC data also showed that the country's official gold reserves stood at USD 77.18 billion down from USD 78.89 billion in July.
Besides pressures faced by yuan against dollar, China is also stepping up its overseas direct investment, (ODI) USD 102.75 billion in the first seven months over taking the Foreign Direct Investment (FDI) of USD 77.13 billion as the per the official data released last month.