China's foreign exchange reserves in August rise to 3.1072 billion dollars

BEIJING (Reuters) – China's foreign exchange reserves unexpectedly rose in August, even as the yuan posted its biggest monthly drop in 25 years, as trade tensions with the United States rose. United.

The country's foreign exchange reserves – the largest in the world – rose $ 3.5 billion in August to $ 3,072 billion, the central bank data said Saturday.

Economists polled by Reuters had forecast that reserves would fall by $ 4 billion from July to $ 3 trillion, likely due to fluctuations in world exchange rates and foreign bond prices. owned by China.

The increase seen in August is explained by China's maintenance of a generally stable international balance of payments and economic growth, the foreign exchange regulator said in a statement issued after the publication of the data.

Bond prices in major countries have also risen, he added.

China has been able to control capital outflows over the past year despite the intensification of the trade war with the United States and the weakening of economic growth in the country.

Reserves rebounded from the trough of October 2018, driven by capital controls and higher foreign investment in Chinese stocks and bonds.

In August, the CNY = CFXS yuan tumbled about 3.8% against the dollar – its biggest monthly drop since the unification of official and market exchange rates by China in 1994. It is currently trading at its lowest level in 11 and a half years.[CNY/]

China has allowed the yuan to surpass the closely watched level of $ 7 on August 5 for the first time since the global financial crisis, just days after the US announced that it would impose more tariffs on Chinese products as of September 1st.

Hours after the slide of the yuan, Washington has called China currency manipulator for the first time since 1994, but the Chinese currency regulator said that this decision had no reason to be and did not go into the sense of facts.

The yuan has depreciated by about 12% against the US dollar since the two sides began exchanging their tariffs for nothing last April.

The regulator said in August that it did not expect a disorderly depreciation of the yuan despite the impact of external factors such as trade frictions, and traders believe the central bank is trying to slow the pace of the decline.

The dollar rose 0.4% in August against a basket of other major .DXY currencies.

STIMULUS

In the face of downward pressure on the economy, China on Friday announced further cuts in bank reserve requirements to free more money for loans. Analysts also expect modest interest rate cuts in mid-September.]

Growth is estimated to be near the bottom of the government's target range of 6 to 6.5 per cent for the year, after slowing to 6.2 per cent in the second quarter, its lowest pace in at least 27 years.

China burned $ 1 trillion in reserves supporting the yuan during the latest economic slowdown in 2015, which also led to a devaluation of the currency.

China has increased its gold reserves this year.

It held 62.45 million ounces of gold in late troy at the end of August, up 4.85% from the 59,560 million ounces end of 2018.

The value of its gold reserves reached 95.45 billion dollars at the end of August against 87.876 billion dollars at the end of July.