News / Business

China forex reserves biggest fall in August

Monday, 07 September 2015 6:44 PM [ Last Update: Monday, 07 September 2015 6:46 PM ]

A file AFP photo shows a Chinese investor walking past a brokerage house in Shanghai.

China's foreign exchange reserves have experienced their biggest monthly fall on record in August, following the turmoil in the world’s second largest economy.

According to central bank figures, China's reserves, seen as the world's largest, plunged $93.9 billion in August to $3.557 trillion.

The decline in reserves has accelerated after Beijing devalued the yuan on August 11.

Meanwhile, Beijing revised down its official reading for growth in 2014, saying the economy grew by 7.3%, a notch below the previous estimate of 7.4%.

Chinese authorities have already unveiled changes to taxes on share dividends aimed at encouraging longer term investment.

Jittery markets

China's stock markets were jittery on Monday. The CSI300 index of the biggest stocks in Shanghai and Shenzhen were down 3.4%, with the Shanghai Composite Index closing down 2.5%.

The stock markets in China have lost nearly 40% of their value since mid-June.

The decline comes despite drastic measures by Beijing to shore up the market.

Analysts believe that the summer crash in Chinese stock market can be attributed to the bursting of a stock market bubble which was encouraged by official media and fueled by borrowed money.

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