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Chart of the Day: Foreign Exchange Reserves Hit 14-Month Low

China’s foreign exchange reserves dropped to a 14-month low at the end of September amid prolonged trade tensions with the U.S. and a weakening yuan.

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The country’s foreign currency reserves were $3.087 trillion at the end of September, falling $22.7 billion from a month earlier, according to the State Administration of Foreign Exchange. This marks the biggest monthly drop since February.

Behind the decline were foreign exchange rate changes and asset price fluctuations, the foreign exchange regulator said in a statement on Sunday. h

The ongoing trade war with the U.S. has exerted great pressure on Chinese exports as rounds of retaliatory tariffs undercut China’s price advantage. Two gauges of activity in China’s manufacturing sector — the official manufacturing purchasing managers index (PMI) and the Caixin manufacturing PMI — both worsened in September, with new export orders contracting.

The yuan has been on a downward trend for months, weakening around 9% since the start of April, according to data from the central bank.

Contact reporter Charlotte Yang (yutingyang@caixin.com)

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