Limp Non-Dollars, Ebbing Asset Prices Drained China's Forex Last Month
Xu Wei
DATE:  Mar 08 2018
/ SOURCE:  Yicai
Limp Non-Dollars, Ebbing Asset Prices Drained China's Forex Last Month Limp Non-Dollars, Ebbing Asset Prices Drained China's Forex Last Month

(Yicai Global) March 8 -- China's forex regulator attributed a dip in the country's foreign exchange reserves last month to fluctuating global financial markets, exchange rate and asset price adjustments, weaker major non-US currencies against the dollar, and retreating asset prices, it said on its website.

The country's foreign exchange reserves were USD3.13 trillion at the end of last month, a drop of USD27 billion or 0.85 percent from the end of January, the first decrease since January 2017, data China's central bank released yesterday show. This figure is also below economists' forecasts. The previous Yicai chief economists' survey predicted the nation's foreign exchange reserves hitting USD3.2 trillion last month.

Cross-border capital flows and transactions remained generally on an even keel last month. Supply generally balanced demand in the foreign exchange market, said the State Administration of Foreign Exchange (SAFE). China's economy has kept to medium- and high-speed growth and supply-side structural reforms have progressed smoothly. The economic operation has shown a sound situation in which growth, quality, structure and economic benefits match one other. A trend is also evident of generally balanced two-way cross-border capital flows.

China's economy will have the conditions and ability to hold to steady future growth. Fundamentals will cause two-way yuan exchange rate fluctuations to become the norm, creating favorable conditions for overall balanced two-way cross-border capital flows in the medium and long term. The global economy is also expected to continue its recovery. Central banks will gradually tighten monetary policy as financial market uncertainties arise. China's foreign exchange reserves are expected to remain generally stable considering domestic and international factors, SAFE concluded.

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Keywords:   Foreign Exchange Reserve,SAFE