China’s foreign exchange reserves stay above $3 trillion till March end
The Dollar Business Bureau
China's foreign exchange reserves in March grew $3.96 billion to $3.009 trillion, compared to $3.005 trillion at the end of February. The March data indicated that the Chinese government’s recent initiatives including easing of capital outflows have given liberty to People's Bank of China to withdraw from foreign exchange intervention
In January, China’s reserves nosedived below $3 trillion for the first instance in nearly six years. However, in February foreign reserves rebounded to their first increase in eight months. The March growth is also the first instance when the reserves increased for two consecutive months since April 2016.
Economists have however noted that this growth is rather temporary, especially in the backdrop of a decline in dollar value.
China's foreign-exchange regulator on Friday said pressure on capital outflows has slightly eased in the first quarter and forex reserves are expected to further stabilise.
Last week, China's State Administration of Foreign Exchange (SAFE) said that pressure from capital outflows has somewhat eased in 2016, and the year 2017 will bring greater flexibility in the yuan's exchange rate. The regulator ensured that authorities will take adequate steps to attract capital inflows in 2017.
The March foreign reserves data comes at a time when Chinese President Xi Jinping is on a state visit to the USA and is currently meeting with US President Donald Trump in Florida. Furthermore, Trump’s recent political rant that China has been a currency manipulator could very well be served again on the Chinese plates when the US treasury announces the currency report next week.
Chinese President Xi has urged Trump to cooperate with China on trade and investment.
Meanwhile, China’s gold reserves value declined to $73.74 billion at end-March, from $74.376 billion at end-February.