China forex reserves rebound above $3 trillion in an unexpected move
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BEIJING (APP) - China's foreign exchange reserves unexpectedly increased by $6.9 billion in February as pressure on its currency the yuan apparently eased, officials said Tuesday.
The world's largest currency hoard rose to $3.01 trillion, the People's Bank of China said on its website, beating a forecast by Bloomberg News that reserves would fall to $2.97 trillion.
It marked a rebound from January, when the reserves dropped by $12.3 billion to below the psychologically significant $3 trillion threshold for the first time in six years.
The result follows months of declines in forex reserves as China sold dollars to defend the yuan against depreciation caused by capital outflows as its economy slows.
Authorities' efforts to put the brakes on money leaving the country by propping up the value of the yuan have rapidly drained reserves.
In recent months Beijing has rolled out a series of stringent new measures to curb overseas transfers, heightening the already strict requirements.
This include cracking down on underground banking operations used to spirit money abroad and curbing "irrational" spending by companies which have been snapping up foreign assets such as football teams, luxury properties and Hollywood studios.
"The fact that they showed the world that the reserves are stabilising at a fairly high number is an important signal," Alicia Garcia Herrero of Natixis in Hong Kong told Bloomberg.
"The realisation that the leadership wants us to have is that China is out of the woods, it's not losing reserves, and we're back to normal."
