It was a drastic drop for China's reserve for January as it plunged from $99.5 billion to $3.23 trillion.  Based on the central bank's data, this has been the lowest level it has reached way back May 2012. However, this is higher compared to the median estimate of $3.20 trillion from the Reuters poll's surveyed economists.

The second sizeable drop happened last December 2015 that fell to $107.9 billion, considered to be the biggest recorded monthly decline.  The central bank strengthens its move to keep yuan from falling after the unexpected August devaluation of the currency, as cited by The Globe and Mail.

In spite of hundreds of billions lost for the last six months, Chinese stocks are still considered the world's biggest. Stocks dropped by $513 billion in 2015 which is the history's greatest yearly drop. Based on the officials' statement, the issue was worsened by the local firms to quickly replay foreign debts and boost dollar buy-outs by local residents as the yuan depreciates.

"Monetary easing is highly needed amid economic slowdown, but the capital outflow will naturally tighten the monetary policy," Hao Zhou, senior emerging markets economist at Commerzbank in Singapore, said in a note after the data.

Bloomberg reports that The People's Bank of China has made every move to emanate the outpouring, admonishing the guessers some punishment.   It interfered last month in the Hong Kong market after the sinking of yuan's offshore exchange to 2.9%.  Besides dollar-selling, the monetary authority also advises Chinese city lenders to delay yuan to control short-selling. This adds to the increase of overnight interbank lending rate on January 12 with an all-time high of 66.8%.

Many analysts' concept, that the drop is going to be less than what was reported.  Commerzbank's Zhou Hao forecast the decline to be at $80 billion. Barclay's Jian Chang pictures the reserves would divest by $140 billion while others have higher estimates, according to Forbes.

Since August, China has been incurring declines much smaller than what consensus predicts.  The local government made every effort to keep yuan from falling. Although Chinese stocks have dived, it is still considered the biggest stocks in the world with the largest market share.