China’s foreign exchange reserves in May fell to $3.19 trillion, central bank data showed on Tuesday, the lowest since December 2011, likely due to the impact of a stronger dollar.
Economists polled by Reuters had predicted foreign exchange reserves would fall to $3.20 trillion from $3.22 trillion at the end of April.
China’s reserves, the world’s largest, fell by $27.9 billion in May – the biggest monthly drop since February. The reserves rose by $7.1 billion in April and $10.3 billion in March.
Meanwhile, the yuan edged lower against the dollar on Tuesday, as companies bought the greenback hovering near four-week lows, offsetting suspected state-bank intervention to shore up the Chinese currency.
Easing expectations of an imminent U.S. interest rate increase will likely reduce pressure on the yuan in coming weeks, but traders said the central bank will continue to hold a firm line on the renminbi to discourage speculators.