China's central bank announced on Wednesday that its foreign reserve has dropped even further to around $3.5 trillion. Chinese monetary authorities and outside observers have pointed to several factors as the reasons behind the continuous flight of foreign currency out of the country.

Xinhua reported that almost $4.4 billion was removed from the country's foreign reserve. The August forex decline was much worse, almost $94 billion was lost during that month.

Like Us on Facebook

The Chinese government recently announced that the country's economic growth was at seven percent during the first 6 months of 2015.

Officials say a slowdown in the property sector, idle factories and slow demand of goods, both domestically and internationally, have contributed to the continuing decline of China's foreign exchange reserve. Still, China currently holds the largest amount foreign currency in the world.

Financial analysts are starting to have doubts if Beijing can continue to prop up the yuan despite its devaluation last month and the consecutive monthly decrease of the country's foreign reserve.

Experts pointed out that outside money is now exiting the country because of the sluggish economy and speculations that the United States may raise its interest rates any time now. Many believe that China will continue to see its reserves decline in the months to come.

Commerzbank economist Zhou Hao said China's foreign reserve was used by the Chinese financial authorities in order to prop up the country's stock market, which has been battered for the past several months.

When China devalued it money on August, it raised the prospect of a currency war erupting around the world. Chinese leaders are now being watched if they will be successful in focusing economic growth based on the demand of local consumers instead of depending on exports and investments.

Even the country's gold reserve declined in September. China's gold stockpile in September declined by almost $600 million compared to August.

Usually, the People's Bank of China releases foreign exchange currency data every quarter. But it has shifted to presenting monthly reports in order to be aligned with the International Monetary Fund (IMF) standards.

China's special drawing rights with IMF also decreased slightly, losing around $60 million, it now stands at $10.47 billion.

TagsChina's forex, china's foreign reserve, China Yuan Devaluation, china stock market decline, china gold reserves, china imf special drawing rights, International Monetary Fund, chinese stock index