BEIJING (Reuters) - China's foreign exchange reserves unexpectedly
rose in January as the yuan firmed after Beijing and Washington signed
an initial trade deal, defusing an 18-month row that weighed on global
growth.
The country's foreign exchange reserves -- the world's largest --
rose $7.57 billion in January to $3.115 trillion, central bank data
showed on Friday.
Economists polled by Reuters had expected reserves would fall by $7.92 billion to $3.100 trillion.
The increase in January was due to changes in currency exchange rates
and the prices of global assets that China holds, the foreign exchange
regulator said in a statement.
The State Administration of Foreign Exchange (SAFE) also said the
impact of a coronavirus outbreak on China's economy would be temporary.
Capital Economics estimated capital outflows last month picked up to
$30 billion from $15 billion in December, with the increase likely
coming in the last third of the month as public awareness of the
outbreak jumped.
That amount would still be considered modest, but outflow pressures
may have escalated this week as Chinese financial markets reopened after
an extended holiday and reacted to the rapidly spreading epidemic.
Some $700 billion in capitalization was wiped off mainland stock
markets on Monday alone, though they clawed back a bit of ground later
in the week.
Strict capital controls have helped China keep outflows under control
over the past year despite the trade war with the United States and
weakening economic growth at home. Rising foreign investment in Chinese
stocks and bonds have also seen growth in inflows.
China's forex reserves climbed $35.2 billion in 2019, after a drop of $67.2 billion in 2018.
China burned through $1 trillion of reserves supporting the
yuan during the previous economic downturn which was marked by
rapid capital flight and a surprising yuan devaluation in 2015.
The yuan rose 0.38% against the dollar in January, but it fell 1%
between Jan. 20 and Jan. 23 amid mounting worries about the impact from
the outbreak that started in the central Chinese city of Wuhan.
The dollar rose about 1% in January against a basket of other major currencies (DXY).
China held 62.64 million fine troy ounces of gold at the end of January, unchanged from 62.64 million ounces at the end of 2019.
The value of China's gold reserves rose to $99.24 billion at the end of January, from $95.406 billion at the end of 2019.
