China's foreign exchange reserves fell to 3.44 trillion USD in November, dropping by 87.2 billion dollars from October, the People's Bank of China announced on Dec. 7.

From May to September, China's foreign reserves declined for five consecutive months. And the fall in November came after an 11.4 billion dollar rise registered in October.

Fuelled by exports, the foreign reserve grew for more than a decade before beginning its decline in the third quarter of 2014. In the third quarter of 2015, reserves fell by 180 billion USD, much more than the 40 billion USD decrease in the second quarter and the fifth consecutive quarterly drop.

Industry experts pointed out that the translation loss caused by the strong U.S. dollar in November is an important reason for the fall of China's foreign reserve. This November, the U.S. dollar index rose from 96.7 to over 100. Xie Yaxuan, chief macroeconomic analyst of China Merchants Securities, calculated that in November, 30 to 35 billion dollars of the foreign reserve loss was due to the rise of the U.S. dollar index.

Zhao Yang, chief Chinese economist of Nomura Securities, said that because the euro and the yen saw relatively significant depreciation in November, the revaluation of non-dollar assets also experienced an exchange loss. He predicts that in December, China's reserve may continue to drop.

Besides the fluctuation of exchange rate, the outflow pressure of cross-border capital is also a cause of the fall in November. Liu Dongliang, senior analyst of China Merchants Bank, said that after briefly stabilizing in October, China's foreign reserve fell substantially in November, which is a reflection of the capital outflow pressure. Currently, many experts still predict the depreciation of yuan and a decline of return on renminbi assets. 

In the future, due to factors such as the spillover effect of developed economies' monetary policies and the slowdown of China's domestic economy, the outflow pressure of cross-border capital will still exist. However, China's strong economy and the current, relatively large surplus can guarantee that the yuan will not depreciate sharply and the fluctuation of the foreign reserve is entirely normal.