After peaking at $4 trillion in 6/15, China’s foreign exchange holdings have steadily fallen and are now $3.12 trillion, their lowest level since 3/11. The decline would be larger absent China’s trade surplus of roughly $50 billion/month which boosts China’s foreign currency holdings. The continued decline means China’s currency remains overvalued and China’s trade surpluses would be larger without the government’s use of its reserves to ward off faster depreciation.