China's FX reserves plunge by $99.5bn

China's foreign currency reserves fell by $99.5bn in January, according to data released by the People's Bank of China.

Information published over the weekend also points to a decline of $420bn over the past six months as Beijing attempts to boost the valuation of its own currency - the yuan - and calm investor flight.

The country's current reserves, in the region of $3.23trn, are at their lowest since May 2012, but still remain the world’s largest chest of foreign currency holdings.

Jameel Ahmad, chief market analyst at FXTM, said, “The data in itself provides clear evidence that the PBoC is intervening regularly in the markets in an attempt to boost the value of its own currency and selling dollars as the Chinese Yuan continues to face depreciation pressures with the currency recently falling to a five-year low.

“It is quite frankly unsustainable for the PBoC to continue defending the currency and spending their reserves at this speed, especially when you take into account that it was the shock devaluation by the Chinese central bank last August that encouraged the yuan to begin its steep decline in the first place.”