Chinese stock markets tumbled again on Monday as it emerged that the Beijing authorities spent nearly $100bn last month propping up the yuan.
The $94bn (£61bn) fall in central bank reserves was the biggest on record, although in percentage terms it was the biggest for three years.
Investors in China returning to their trading desks after a long weekend reacted to falls in stocks in the US and Europe on Friday. The sell-off pushed the Shanghai and Shenzhen CSI 300 index down by 3.4%, leaving the wider Shanghai composite index down by 2.5%.
It came despite the country’s central bank governor, Zhou Xiaochuan, trying to calm nerves, arguing that the “correction in the stock market is almost done”. He predicted markets would be more stable after weeks of turbulence.
His message was reinforced by China’s top economic planning agency, which declared that the economy’s growth prospects were improving. The NDRC said: “The power usage, rail freight, as well as real estate prices and turnover have all improved into August, indicating the economy is stabilising amid fluctuations.”
