China’s capital account deficit continues to widen in Q3

Beijing, Nov 11 (IANS) China’s capital account deficit continued to widen in the third quarter of 2015 while the country’s reserve assets dropped sharply, official figures showed on Wednesday.

Deficit under the capital and financial account rose to $63.4 billion for the three months ending in September, up from $40.6 billion in the second quarter, according to preliminary statistics released by the State Administration of Foreign Exchange (SAFE).

Reserve assets, most of which are foreign exchange reserves, decreased $160.5 billion, compared with an increase of $13.1 billion in the second quarter, reported Xinhua.

China started to post deficits on its capital and financial account in the second quarter of 2014 due to rapid increases in overseas investment and speculation of depreciation of the yuan.

On August 11 this year, the central bank decided to let the market have a greater say in forming the yuan’s central parity rate against the US dollar, which led to a depreciation of more than 4 percent in August.

China reported a current account surplus of $63.4 billion in the third quarter, narrowing from $73 billion posted in the second quarter, SAFE data showed.

The country saw a $212 billion current account surplus for the first three quarters combined and a deficit of $121.9 billion on the capital and financial account during that period.

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