 "File picture of Chinese 100 yuan banknotes in a counting machine while a clerk counts them at a branch of a commercial bank in Beijing")
China's foreign-exchange reserves, the world's largest foreign currency hoard, slipped to the lowest level since 2011 as the central bank continued its defence of the currency. The reserves fell by $15.9 billion to $3.19 trillion in August, the People's Bank of China said in a statement Wednesday. That level, down slightly but still in line with most of the readings this year, matched the median estimate in a Bloomberg survey of economists.
"The central bank is still very active in the foreign exchange market, not quite as active as at the start of the year, but still intervening pretty heavily to prop up the currency," said Julian Evans-Pritchard, a China economist at Capital Economics in Singapore. "Outflows aren't going away." The stockpile has slipped from a record $4 trillion in June 2014. Outflow pressures have increased again as some Federal Reserve officials have signaled that they may raise the main interest rate as early as this month.
Investors are pricing in a 24 percent probability that the Fed will raise borrowing costs at its Sept. 20-21 meeting, and 52 percent that it will act in December, Fed funds futures prices tracked by Bloomberg showed Wednesday.
