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China’s foreign exchange reserves rose again in March but by less than expected as authorities in the world’s second largest economy fight with halting capital outflows and have seen a stabilisation in the renminbi this year.

Total FX reserves hit $3.009.1tn last month, up from $3.005.1tn and just below a forecast of $3.01tn, according to the Chinese central bank. It is the second consecutive month of climbs after an eight-month streak of declining reserves.

China’s renminbi has broadly stabilised this year following a record 6.5 per cent slump against the dollar last year that prompted the central bank to sell dollars to support the exchange rate.

The broad stabilisation in reserves was a sign Beijing has stepped back from currency intervention, said Julian Evans-Pritchard, China economist at Capital Economics.

“The obvious follow-up question is whether this halt to official intervention is a temporary phenomenon or a more permanent shift. Our hunch is that it will be temporary”, he said, adding that a recent halt in the climbing value of the dollar has eased pressure on the PBoC.

Chart via Bloomberg

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