BEIJING: China’s foreign exchange reserves rose slightly in March, though by a bit less than the market expected, as capital control measures and a pause in the dollar’s rally helped contain outflows.
Reserves increased $3.96 billion during March to total $3.009 trillion. In January, reserves slipped below $3 trillion, but a month later, they moved back above that level, increasing $6.92 billion to reach $3.005 trillion in the first rise in eight months.
Economists polled by Reuters had expected foreign exchange reserves in March to rise by $5 billion to $3.01 trillion in March.
Capital Economics said the way reserves were broadly stable in March “suggests that the recent easing of capital outflows has allowed the People’s Bank of China to step back from FX intervention”.
The latest reserve data came out as Chinese President Xi Jinping is meeting with US President Donald Trump in Florida. The March increase marks the first time reserves had increased two consecutive months since April 2016. The State Administration of Foreign Exchange (SAFE), the foreign exchange regulator, said last week that pressure from capital outflows eased somewhat in 2016 and there will be greater flexibility in the yuan’s exchange rate in 2017. — Reuters
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