China’s foreign exchange reserves continued its downslide in December as it declined for straight six months to hit a five year low. However, the Chinese government can take respite in the fact that the decline was less than what most analysts had expected. \u00a0 \u00a0\u00a0
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China’s exchange reserves witnessed a decline of $41 billion last month to reach at $3.011 trillion, according to the data issued by China’s central bank on Saturday. The reserves had recorded more steep fall in the previous month of November at $69.06 billion.
Meanwhile, Reuters economists’ poll had predicted a more sharp decline in reserves for December. The poll estimated that the country’s reserves would drop by $51 billion to reach $3.001 trillion.
The continuous freefall in China’s reserves has been attributed to yuan’s poor performance during most part of 2016. With Yuan losing its value sharply against \u00a0the US dollar, the Chinese government had dig deep into foreign reserves to save its falling currency.
The yuan depreciated 6.6 percent against resurgent dollar in 2016. This has been the Chinese currency’s biggest single year fall since 1994. \u00a0
Now, most economists claimed that as Donald Trump’s reign is set to begin in the White House, yuan will face further pressure in 2017. Trump unleashed barrage of tirades against China’ economic policies while promising in one of the election rallies that he will fix China if he is elected as a president.
However, many analysts believe that China’s foreign exchange reserves are still in a healthy position to counter any political or economic setbacks. The Asian giant still boosts the world’s largest stash of forex reserves by far.<\/p>\n