(Yicai Global) March 9 -- The People's Bank of China is set to hand in more than CNY1 trillion (USD158.3 billion) in profits this year to the central government, which should help alleviate local government’s pressures arising from declining fiscal revenues.

The gains are mainly generated by managing foreign exchange reserves in the past years, the central bank said in a statement yesterday. 

The procedure is not new. "This is not the first time the PBOC hands in balance profits," Guan Tao, global chief economist at BOC International, said to Yicai Global. 

The PBOC's forex reserve management incomes have been relatively stable in recent years, Wen Bin, chief researcher at China Minsheng Bank, told Yicai Global. The central bank's open market operations also generate revenue. 

Most of the funds will be quickly sent to county and district governments eventually to deal with the tensions caused by decreasing fiscal revenues while stabilizing employment and ensuring people's livelihood, the PBOC and the finance ministry said in their separate statements yesterday. 

The national lender's forex reserves tallied USD3.21 trillion as of Feb. 28, standing above USD3.2 trillion for the 10th consecutive month, according to data from the State Administration of Foreign Exchange. 

Turning over profits to the central government by certain financial institutions and state bodies is in compliance with Chinese laws and commonplace in developed economies worldwide, an official wrote in the question and answer section of the finance ministry's website.

Besides the PBOC, other state institutions such as cigarette manufacturer China National Tobacco, and sovereign wealth fund China Investment will also deliver parts of their profits to the central government this year.

Editors: Tang Shihua, Emmi Laine, Xiao Yi