CHINA’S foreign exchange reserves fell US$9 billion in November to US$3.096 trillion, central bank data showed Saturday, as the United States and China remained locked in negotiations over an interim trade agreement.

Analysts polled had expected China’s reserves, the world’s largest, would fall US$4 billion to US$3.101 trillion in November.

Despite China’s slowing economy and escalating U.S.-China trade spat, its reserves have been gradually rising since late 2018, helped by tight capital controls and rising inflows from foreign investors who are snapping up China’s stocks and bonds.

Modest changes in reserve levels in recent months have been largely ascribed to fluctuations in global exchange rates and the value of assets that China holds such as foreign bonds.

The yuan has been driven largely by twists and turns in the trade dispute between China and the United States.

After sliding sharply this summer as the dispute suddenly escalated, the yuan rose for three straight months through November on hopes of a trade truce, only to slide again in early December as tensions between the United States and China flared. Fresh U.S. tariffs on Chinese goods are set to take effect Dec. 15.

It gained 0.12 percent against the U.S. dollar in November, but remains about 2.3 percent weaker for the year to date.

The dollar, meanwhile, rose about 1 percent against a basket of other major currencies in November.

The value of the country’s gold reserves fell to US$91.47 billion at the end of November from US$94.65 billion at the end of October.

China held 62.64 million fine troy ounces of gold at the end of November, unchanged from October.

China’s economic growth cooled to 6 percent in the third quarter, the slowest pace in nearly 30 years, and many economists believe it will decelerate further into the upper 5 percent range in 2020.

Still, analysts note capital outflows have been modest compared with the last economic downturn in 2015-16, when policymakers burned through roughly US$1 trillion in reserves supporting the yuan.

China’s central bank has started to slowly trim interest rates in recent months, and more reductions are expected in coming quarters to avert a sharper slowdown. (SD-Agencies)