The Exchange reserve fell up to $3 trillion for the first time in six years. It is smaller in number compared to the $12.3 billion last month but still higher than the anticipated capital account of China in the midst of weakened greenback. This may not have an immediate impact but this could affect the sentiment of investors in the yuan exchange rate. Yet, the U.S. dollar index surged by 7.1 percent in the fourth quarter in the previous year and Fed rate increase with President Trump’s win in the U.S. Presidential election inducing Chinese government to control the offshore investments and individual purchases of foreign exchange. The State of Administration of Foreign Exchange said that the current reserves are ample and moderate capital outflow giving optimism to a balance condition.
