China's central bank and commercial banks sold a net 221.3 billion yuan ($34.3 billion) worth of foreign exchange in November, data showed on Tuesday, reversing October's net buying amid signs of intensifying capital outflows. The market expects the central bank to tolerate further yuan weakness to support the slowing economy, ahead of an expected interest rate rise by the US Federal Reserve this week.
The yuan fell against the dollar on Tuesday after the central bank set the midpoint at its lowest level in more than four years for the second day. Earlier central bank data showed that China's foreign exchange reserves, the world's largest, fell by $87.2 billion in November to $3.44 trillion, the lowest level since February 2013 and the third-largest monthly drop on record.
October's net foreign exchange buying of 12.9 billion yuan indicated a brief respite in money outflows amid an official crackdown on illegal currency dealings and a rebound in the domestic stock market. Capital outflows have intensified since July and leapt between August and September, as the central bank scrambled to stem the yuan's slide following the surprise devaluation of August 11. September's net foreign exchange sales were at a record high of 761.3 billion yuan.