China spent roughly $32bn in foreign exchange reserves to strengthen the renminbi in October, its heaviest monthly intervention in nearly two years in the latest sign of Beijing’s nervousness about the economy.

The data released on Wednesday eased worries that Beijing intended to deploy exchange-rate devaluation as a weapon in its trade war with the US. But it also highlights the dilemma facing China’s central bank as it seeks currency stability without draining reserves.

Some analysts believe authorities do not want the currency to weaken beyond Rmb7.0 per dollar, which some view as a psychological threshold. The onshore renminbi closed at Rmb6.93 to the dollar on Wednesday.

The central bank is also keen to maintain forex reserves above $3tn, leaving the People’s Bank of China with less firepower to defend the currency than during the last bout of depreciation.

Official foreign exchange reserves fell to $3.053tn by the end of October from $3.087tn a month earlier, the PBoC said on Wednesday. Excluding valuation effects, that implies intervention of about $32bn, according to FT estimates, the largest monthly intervention since January 2017.

Iris Pang, Greater China economist at ING in Singapore, said the monthly drop in October was small compared with late 2015, when monthly declines averaged $70bn over a six-month period.

“There is no capital outflow panic in China even as USD/CNY approached 7.0,” she wrote in a note on Wednesday. “The USD/CNY 7.0 handle is a mere round number, not a psychological barrier, as the currency pair has approached this level a number of times.”