China forex reserves drop $70bn as PBoC supports renminbi Largest decline since January as currency weakness helps drive capital outflows

The latest figure for forex reserves also arrives amid signs that ramped-up efforts to curb heavy capital outflows have begun to interfere with foreign businesses in China. Several European businesses have been unable to remit dividends because of new foreign exchange controls that the EU Chamber of Commerce in Beijing called “disruptive to business operations”.

In addition to planned restrictions on foreign mergers and acquisitions aimed at limiting capital flight disguised as outbound investment, Beijing also recently introduced curbs on gold imports and international renminbi payments and plans for restrictions on outbound mergers and acquisitions to boost its currency and help protect its forex reserves.

The impact of such measures will not be fully visible until December forex levels are released.


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