China's Foreign Exhchange Reserve is at its Lowest in Nearly 3 Years

Dec 09, 2015 06:37 AM EST

(Photo : Getty Images) As investors are apparently looking to put their money into foreign assets as China's economy experiences a slowdown, reports indicate that the country's foreign reserve may currently be at its lowest point since 2013.

China's massive foreign exchange reserve has reached its lowest point since 2013. The country's big pile of cash is apparently dwindling fast.

On Monday, China's Central Bank reported $3.4 trillion in foreign exchange reserves. China experienced a great loss in November, according to CNN. This might have been brought about by investors withdrawing their investments from the country. Many of them are reportedly trying to get some of their money out of China.

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Chinese investors are reportedly seeking better opportunities in real estate, art pieces, stocks and bonds abroad. Specific data is difficult to get from China, however, Capital Economics predicts that November set a record for capital outflow from the country.

"Today's data suggest that capital outflows picked up sharply last month," says Julian Evans-Pritchard, chief China economist for research firm Capital Economics.

When money leaves China, it means people are trading their Yuan for Dollars, Euros, and other currencies. It makes the Yuan decrease more in value.

All the proof implies that money has been flowing out of the country real fast since August; the same time that China astonished the world with a surprise devaluation of its currency. The Chinese government suddenly announced that Yuan's value is less than perceived.

In effect, Chinese stock market experienced a major selloff making everyone worry that the economy is declining faster than the government cares to admit.

To counteract these events, China's central bank may use its foreign exchange reserve to buy back Yuan. Although many countries adopt this strategy, it makes the country's reserve fund lower. That is what's happening now.

Over $500 billion has already left China this year, according to U.S. Treasury data. China has limited the amount of money one can move out of the country to $50,000 a year. Beijing has even decreased the amount of money that can be withdrawn overseas in an attempt to stop money from leaving the country.

Tagschina's economy, china fund reserve, foreign exchange reserve, capital outflow, chinese capital outflow, china's lowest point, China Foreign Exchange Reserve Low, yuan