China's foreign exchange reserves dipped 0.7%, or $22.7 billion, to $3.087 trillion in September, the People's Bank of China said Oct. 7.
Wang Chunying, spokesperson of the State Administration of Foreign Exchange, said the drop in reserves was due to changes in the value of foreign currencies and asset prices.
"Bonds usually take up a large portion of many countries' forex reserves," said Zhao Qingming, chief economist of the derivatives unit of China Financial Futures Exchange. "The interest rate hike by the Federal Reserve has led to declines in bond prices across the world, which also influenced the asset reassessment of China's forex reserves."
The Japanese yen also weakened more than 2%, Zhao added. He said China's foreign reserves lost about $10 billion in book value because of the weakening of the yen.
Wang maintained China's holdings will remain generally stable despite uncertainties in the external environment.