China’s foreign exchange reserves fell $9 billion in November to $3.096 trillion, central bank data showed on Saturday, as Washington and Beijing remained locked in negotiations over an interim trade agreement.

Analysts polled by Reuters had expected China’s reserves, the world’s largest, would fall $4 billion to $3.101 trillion in November.

Despite the slowing Chinese economy and escalating US-China trade war, its reserves have been gradually rising since late 2018, helped by tight capital controls and rising inflows from foreign investors who are snapping up the country’s stocks and bonds.

Modest changes in reserve levels in recent months have been largely ascribed to fluctuations in global exchange rates and the value of assets that China holds such as foreign bonds.

The yuan has been driven largely by twists and turns in the 17-month long trade war between China and the United States.

After sliding sharply this summer as the dispute suddenly escalated, the yuan rose for three straight months through November on hopes of a trade truce, only to slide again in early December as tensions between Washington and Beijing flared. Fresh US tariffs on Chinese goods are set to take effect on Dec. 15.

It gained 0.12% against the dollar in November, but remains about 2.3% weaker for the year to date.

The dollar, meanwhile, rose about 1 per cent against a basket of other major currencies in November.

The value of the country’s gold reserves fell to $91.47 billion at the end of November from $94.65 billion at the end of October.

China held 62.64 million fine troy ounces of gold at the end of November, unchanged from October.

China’s economic growth cooled to 6.0% in the third quarter, the slowest pace in nearly 30 years, and many economists believe it will decelerate further into the upper 5% range in 2020.

Still, analysts note capital outflows have been modest compared with the last economic downturn in 2015-16, when policymakers burned through roughly $1 trillion in reserves supporting the yuan.

China’s central bank has started to slowly trim interest rates in recent months, and more reductions are expected in coming quarters to avert a sharper slowdown.

But analysts believe those cuts will likely be more gradual and smaller than those in 2015. If so, moves in the yuan are likely to be influenced more by trade developments than policy easing.

Separately, US President Donald Trump lashed out at the World Bank on Friday, blaming the international financial institution for lending money to China.

“Why is the World Bank loaning money to China? Can this be possible? China has plenty of money, and if they don’t, they create it. STOP!” Trump wrote on Twitter.

The president was reiterating a position long held by his administration, including David Malpass when he was a Treasury Department official prior to his election as the current head of the World Bank.

Trump’s message on the World Bank was also echoed by his treasury secretary, Steven Mnuchin, who told a House of Representatives committee on Thursday that the United States “has objected” to the institution’s multi-year programme of loans and projects in China.

That programme was nonetheless adopted on Thursday. It plans to reduce its lending to China.

The programme “reflects the evolution of our relationship with China,” Martin Raiser, World Bank Country Director for China, said on Thursday. “Our engagement will be increasingly selective.” But the reduction is not enough for Washington, which argues that the world’s second-largest economy is rich enough to finance itself and not depend on loans from the World Bank, which is supposed to bring financial resources to poor countries.

Trump’s very public stance comes amid negotiations between Washington and Beijing seeking to end the US president’s 18-month-long trade war, which is aimed at forcing China to make concessions on protecting American businesses and reducing its trade surplus.

There is a great deal of uncertainty about the date of a possible partial agreement, which Trump said was imminent in October.

Top White House economic adviser Larry Kudlow said on Friday that a Dec. 15 deadline is still in place to impose a new round of US tariffs on Chinese consumer goods, but President Donald Trump likes where trade talks with China are going.

Agencies