Listen to this article
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
Get alerts on Global Economy when a new story is published