China’s reserves of forex stay above $3t mark

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BEIJING (China) Apr 8 (APP): For the second month in
running, China’s foreign exchange reserves rose slightly in
March to steady above $3 trillion.
According to analysts, the stockpile will remain stable
at least in the short term as the economy stabilizes.
The reserves increased by $3.96 billion during March to
reach $3.009 trillion, according to data of the People’s Bank
of China, the central bank on Saturday.
It marked the first time that the reserves had increased
for two consecutive months since April 2016.
In January, the reserves fell below the $3 trillion mark,
triggering concerns that they may continue to drop. But, in
February, the reserves rose above that level.
Capital outflows are an important factor influencing China’s
scale of foreign exchange reserves, said Zhang Yansheng, chief
economist at the China Center for International Economic
Exchanges.
“The US’ economic prospects remain blurred and the Chinese
economy has been widely seen as having largely stabilized,
contributing to easing capital outflows,” Zhang said.
Zhu Haibin, chief China economist with JPMorgan Chase &
Co, also said capital outflows are expected to slow this
year.
The State Administration of Foreign Exchange said that the
country’s foreign exchange reserves “may become more stable”
given the resilient economic fundamentals.
“China’s economy has sound fundamentals, great potential
and a high level of resilience, and will continue to grow at
a stable and relatively fast pace,” it said.
Cross-border capital flows will also become more balanced
and the reform to marketize the exchange rate formation of the
renminbi has progressed steadily, contributing to the easing
capital outflow pressure it faces, the statement said.
China’s economic growth remained stable in the first
two months, according to data released by the National
Bureau of Statistics.
Analysts said the trend is expected to continue in March
and April.”The trend of stable and improving growth will
continue in April,” said Hu Yuexiao, chief analyst of
Shanghai Securities Co.
Investment growth has picked up and corporate profits are
also improving, he said. In the first quarter of this year,
foreign exchange reserves fell by $1.4 billion and the fall
was significantly smaller than in the previous two quarters,
the administration said.
China’s gold reserves’ value fell to $73.74 billion at
the end of March from $74.376 billion at the end of February,
the central bank said.