Yuan exchange rate close to equilibrium: China deputy cbank governor

The reserves decreased by $43.26 billion in September, marking the fourth consecutive month of declines, according to the People’s Bank of China.

BEIJING-China’s foreign-exchange reserves fell to $3.514 trillion at the end of September, after the reserves recorded its biggest monthly drop in August, the People’s Bank of China said on Wednesday.

China’s worldwide Monetary Fund (IMF) reserve position stood at $4.69 billion, down from $4.73 billion the previous month.

The PBOC devalued the yuan and switched to a more market- oriented reference rate in August, prompting a 2.6 per cent decline in the currency that month and a record $141.66 billion of estimated capital outflows.

Policy makers have been determined to calm sentiment after a summer rout in stocks, the yuan devaluation and a series of clumsy attempts by authorities to stabilise equities spread turmoil in global financial markets.

China’s central bank on Thursday launched the China global Payment System (CIPS), a worldwide payments superhighway for the yuan to facilitate trade settlement and investment dominated in the yuan. Chinese policymakers have told Reuters that Beijing was so shocked by the worldwide reaction to the yuan’s drop that they had shelved plans for further adjustments.

“The exchange rate gap between onshore and offshore yuan has been narrowed substantially in September, partly owing to the PBOC’s intervention, but also partly to better markets expectation”, he said.

In the short term, however, analysts said Beijing was keen to restore investor confidence even as a rapid volley of economic and market support measures has produced mixed results so far. The bank had previously released the data on a quarterly basis.