China money
China doubled the daily trading band for its currency this year to 2%

China’s forex reserves rose slightly in February, expanding for the first time since June, official data showed on Tuesday.

China money
China doubled the daily trading band for its currency this year to 2%
The country’s outstanding forex reserves stood at 3.0051 trillion U.S. dollars by the end of last month, up from 2.9982 trillion dollars a month earlier, according to data from the People’s Bank of China (PBOC).The rebound came after January’s decline sent the country’s forex reserves below the closely watched 3-trillion-dollar mark for the first time since February 2011.State Administration of Foreign Exchange (SAFE) attributed the rebound to the increased value of forex reserves’ investment, though major currencies continued to weaken against the greenback in February.

China’s forex reserves tend to stabilize despite fluctuations, as pressure from capital outflows is expected to ease with the country’s economic growth momentum continuing to improve, SAFE said in a statement on its website.Tom Orlik, chief Asia Economist at Bloomberg, said stronger economic growth, with purchasing managers’ indexes surprisingly upbeat in February, “provides positive mood music” and suggests the central bank has more room to guide rates higher.Holidays ate into the number of working days in February, already a short month, which also likely helped stem capital outflows, Orlik said.

However, he expected the months ahead to be more challenging with a high-probability Fed move raising the possibility of three rate hikes over the course of the year, forcing China to recalibrate its policy settings.Pan Gongsheng, deputy governor of PBOC, dismissed concerns about China’s forex reserve level on Saturday.”China’s forex reserves are more than sufficient, either by internationally accepted traditional standards or the latest standards worked out by scholars,” said Pan on the sidelines of the annual session of the Chinese People’s Political Consultative Conference (CPPCC) National Committee.Tuesday’s data also showed China’s gold reserves climbed to 74.38 billion dollars at the end of last month from 71.29 billion dollars in January.

Source: Xinhua/NewsGhana.com.gh

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.