Chinese media report that China saw a record-high decrease in its currency reserves in Q3 2015. The People’s Bank of China sold its currency reserves at an unprecedented rate, which means that this was the key reason for the decrease. The thing is that sellout of currency reserves was intended to suspend the strongest devaluation of the Chinese Yuan seen over the last 20 years.
With that said, multiple analyst estimates have failed so far. According to the official figures, the central bank’s currency reserves shrank by 180 billion dollars all the way down to 3,51 trillion dollars.
Still, September’s decline was only 43,3 billion dollars while analysts had expected a much considerable drop – 57 billion dollars.
We should remind you that the biggest flight of foreign currency (estimated at 141,66 billion dollars) was seen in August 2015, when the People’s Bank of China decided to devalue its national currency. The central bank conducted several internal and external currency interventions to eliminate the volatility.
FOREX
In the meantime, the Chinese Yuan is still recovering from the downtrend against the U.S. Dollar, Masterforex-V Academy reports. At this point, USDCNY is forming wave C and is currently moving around 6,3453.
Major support levels - 6,34 and 6,32
Major resistance levels - 6,3830 + MF sloping channel (as shown in the chart below).
