China Nov FX Reserves Rise for 10th Month as Outflow Risks Ebb

IMF China

IMF China

China's foreign exchange reserves dropped by almost $1 trillion from a peak of $3.99 trillion in June 2014 to $2.998 trillion in January this year as it sought to shore up the yuan and reduce capital outflows.

This marks an increase of more than 10 billion dollars from a month earlier, according to the People's Bank of China.

Foreign exchange reserves suggest that capital outflows continued to be a non-issue last month, Julian Evans-Pritchard, an economist at Capital Economics, said.

Net foreign exchange buying by both China's central bank and commercial banks rose to multi-year highs in October, marking a policy victory for the authorities after a long battle to stabilize the yuan, although analysts say capital flows are likely to remain volatile as the economy slows. Economists polled by The Wall Street Journal had expected a rise of $13 billion.

In January, China's foreign exchange reserves fell below 3 trillion US dollars, but as the economy is on a firmer footing and the yuan continues to stabilize, the stockpile has increased steadily since February.

Monday's data also showed that the country's gold reserves rose to 75.83 billion dollars by the end of November, up from 75.24 billion dollars at the end of October.