China’s foreign exchange reserves have dropped below the psychological level of US$3 trillion for the first time since February 2011. The reserves fell by US$12.3 billion last month, a smaller decline than in December, but still larger than expected in light of strict capital account measures adopted at the end of last year and a falling US dollar. The reserves stood at US$2.9982 trillion at the end of last month, according to the South China Morning Post. “The US$3 trillion threshold is more of a psychological thing,” Julian Evans-Pritchard, a China analyst at Capital Economics, said. “The capital outflows were largely eased given that yuan appreciation last month created a sign of two-way fluctuations and control measures were implemented strictly.” A statement from the State Administration of Foreign Exchange blamed seasonal factors for the larger than expected fall.