business
China’s forex fall slows in February, says central bank
Chinese economic authorities have embarked on a charm offensive in recent weeks, seeking to reassure global markets over the health of the world's second-largest economy and its currency. – Reuters pic, March 7, 2016.The decline in China's foreign exchange reserves slowed last month, the central bank said today, an unexpected spot of good news for policymakers in Beijing facing a flood of cash leaving the country.
China's foreign-exchange reserves dropped to US$3.20 trillion (RM13.10 trillion) at the end of February, the People's Bank of China (PBoC) said on its website, beating economists' median prediction of US$3.19 trillion in a Bloomberg News survey.
The figure represented a drop of US$28.6 billion from the month before – far smaller than the US$99.5 billion decline in January or December's record monthly drop of $108 billion as the central bank sold dollars to prop up the yuan.
Chinese economic authorities have embarked on a charm offensive in recent weeks, seeking to reassure global markets over the health of the world's second-largest economy and its currency.
A rocky start to the year has seen the yuan's central rate against the dollar surprisingly lowered by authorities, a surge in capital flight, and ratings agency Moody's cutting its outlook on Chinese sovereign bonds.
At a G20 finance ministers meeting in Shanghai 10 days ago China's central bank governor said that "there is no basis for persistent renminbi depreciation from the perspective of fundamentals".
Julian Evans-Pritchard, China economist for Capital Economics, said in a note: "The upshot is that the combination of tighter capital controls along with efforts by the PBOC to better communicate its intention not to devalue [the] renminbi seems to be bearing some fruit."
He added that expectations of further depreciation of the yuan have eased and investors are "gradually coming around to our view that the PBOC still has plenty of firepower to defend the currency". – AFP, March 7, 2016.
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