China’s forex reserves rise for first time in 8 months
China’s foreign exchange (forex) reserves unexpectedly rose for the first time in eight months last month, rebounding above US$3 trillion (RM13.3 trillion) as a regulatory crackdown and weakness in the US dollar helped staunch capital outflows.
Reserves rose US$6.92 billion last month to US$3 trillion, the first increase since June last year, compared with a drop of US$12.3 billion in January, when reserves fell to US$2.99 trillion.
Economists had expected forex reserves to drop by US$25 billion to US$2.973 trillion last month.
China has tightened rules on moving capital outside the country in recent months as it seeks to support the yuan and stem a slide in its forex reserves.
It burned through nearly US$320 billion of reserves last year but the yuan still fell 6.6 per cent against the US dollar, its biggest annual drop since 1994.
The yuan has steadied in recent weeks as the US dollar’s rally lost steam. The Chinese currency gained 0.2 per cent last month, and is up 0.8 per cent so far this year.
However, expectations of United States interest rate hikes beginning as early as next week have rekindled fears that the yuan could come under renewed pressure.
The prospect of the yuan depreciating could inflame trade tensions with the US President Donald Trump’s administration.
China’s foreign exchange reserves rose to US$3 trillion last month, the first increase since June last year.