MNI 5 THINGS: China FX Reserves Fall $33.9 Billion In Oct

     BEIJING (MNI) - China's foreign exchange reserves fell in October due to

value effects, the State Administration of Foreign Exchange, a division of the

People's Bank of China, said Wednesday.

     - FX reserves fell by $33.9 billion to $3.05 trillion as of Oct. 30, the

lowest overall level since April 2017 when reserves stood at $3.03 trillion,

according to the PBOC. The decline outpaced the $22.7 billion fall seen in

September, and was the biggest decline since December 2016, when they slid

$41.08 billion from the previous month.

     - SAFE said the lower valuation of China's FX reserves was due to exchange

rate conversions and asset price changes in major countries at a time of

increasing volatility in global financial markets and an over 2% gain in the

U.S. Dollar Index.

     - SAFE said the foreign exchange market is operating smoothly and stably.

In October, banks recorded a net sale of about $3 billion of foreign currency,

declining more than 80% from September. Individuals' net purchases of foreign

currency also contracted, SAFE added, indicating that the market remains

confident in the yuan.

     - The regulator warned the country is facing uncertainties from the

external environment, but the domestic economy is resilient and able to

withstand risks. Forex reserves are expected to remain stable amid volatility,

SAFE said.

     - Since pressure on the yuan remains strong, the central bank may use

reserves to boost the currency as it falls towards the key 7 level against the

U.S. dollar. The yuan depreciated to 6.9780 against the U.S. dollar on Oct 31,

the weakest level since May 20, 2008.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI London Bureau; +44208-865-3829; email: Jason.Webb@marketnews.com

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