China’s foreign currency reserves declined in October in a sign Beijing might be intervening in the market to keep its yuan from falling too far against the dollar and triggering a possible backlash from the United States amid a tariff battle.
The reserves, the world’s largest, declined by about US$34 billion to just over US$3 trillion, according to central bank data released Wednesday.
The bank gave no indication how much of that was due to selling dollars to support the yuan. But Chinese authorities have promised to avoid a “competitive devaluation” to help exporters who face US tariff hikes in a fight over Beijing’s technology policy.
The yuan, also known as the renminbi, sank to a 10-year low of 6.9756 per dollar at the end of October, coming close to breaking the level of seven to the greenback. It strengthened slightly this month, suggesting authorities sold dollars to stop its slide.
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