In August, Chinese investors divested the largest amount of US bonds and stocks in four years, leading to speculation that the government might be building up reserves to support the depreciating yuan.
The majority of the $21.2 billion in sales consisted of US Treasuries and equities, with Asian funds also reducing their agency debt holdings, as reported in data from the US Department of the Treasury released on Wednesday. During August, the onshore yuan experienced a significant decline against the US dollar, reaching its lowest point since November. This prompted Beijing to instruct state-owned banks to intensify their intervention in the currency market.
