China's forex reserves declined during December

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© Reuters. Now at $3 trillion level.© Reuters. Now at $3 trillion level.

Stock Trading - Forex reserves in China shrank last month, but ended the year above U.S. $3 trillion, according to figures released by the People's Bank of China this weekend.
The report comes among rising debate on whether the Chinese government will strategically defend the yuan or prevent depletion of its reserves.
The People’s Bank of China figures released on Saturday said that foreign exchange reserves fell by U.S. $41 billion in December to U.S. $3.01 trillion.
Forex reserves dropped by U.S. $319.8 billion for Beijing last year.
The government said later the central bank’s efforts to stabilize the yuan were the primary reason for the decline in its reserves during 2016.
“In terms of the situation in December, the central bank’s supply of foreign exchange to adjust market demand and supply, the depreciation of non-U.S. dollar currencies against the greenback, and other factors, led to the decline of foreign exchange reserves,” according to a statement by the regulatory authorities.
Forex analysts said the PBOC has regularly relied on foreign exchange reserves since the summer of 2015 to prevent a deep depreciation of the yuan and moderate risks of capital outflow.
For the coming year, the central bank said its goal is to stabilize market expectations and prevent undue financial risks.

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