China foreign reserves gain on yuan, capital curbs

by BLOOMBERG

BEIJING • China’s foreign-currency holdings resumed gains last month as the government kept capital curbs in place and the yuan capped its best quarter in a decade.

Reserves rose US$8.34 billion to US$3.143 trillion (RM12.17 trillion) in March from the previous month, the People’s Bank of China (PBoC) said yesterday. That was slightly below the US$3.146 trillion estimate in a Bloomberg survey of economists.

The March figure marks a turnaround after falling in February for the first time in 13 months. The State Administration of Foreign Exchange (SAFE) expects the country’s foreign reserves will remain stable.

“China’s foreign-exchange (forex) reserve rose amid a combination of factors in March,” SAFE said in a statement. “The supply and demand of forex has been relatively stable while the forex market continues to be balanced. Risk aversion rose in international markets while non-dollar currencies have strengthened against the dollar.”

China’s stockpile, the world’s largest, increased last year for the first time since 2014 as robust economic growth boosted confidence in the yuan and trade remained strong. Still, rising trade tension with the US may lead to slower growth of the holdings, and even renew capital outflow pressure on emerging-market economies including China.