China's foreign exchange reserves rose $10.3 billion in March
Beijing - AFP
China reversed four months of declines in its giant foreign exchange reserves in March, the central bank said Thursday, as the flood of money leaving the country eased.
China's foreign exchange reserves rose $10.3 billion to $3.21 trillion at the end of March, the People's Bank of China (PBoC) said on its website, well ahead of economists' median prediction of a $6.3 billion decline in a Bloomberg News survey.
The data were a positive sign for Beijing policymakers, who have sought to reassure investors anxious about the economic outlook for the world's second-largest economy and further depreciation of its yuan currency.
Authorities have repeatedly insisted that there was "no basis" for a steep devaluation in the unit and have tightened capital controls in order to stem the outflow.
Since the start of this year the yuan's central rate against the dollar has been surprisingly lowered by authorities, capital flight has surged, and ratings agencies Moody's and S&P have cut their outlook on Chinese sovereign bonds.
Brian Jackson, Beijing-based economist with IHS Global Insight, told AFP that government measures had managed to "discipline" the market.
"There were a lot of people who had bets against the yuan in the first quarter of the year," he said, adding that Beijing authorities were motivated to "use their firepower to punish those bets against the yuan".
Julian Evans-Pritchard, of Capital Economics, said that recent appreciation of the yuan against the dollar had "shifted market expectations", but noted that capital outflow pressures "could resurface at some point during the coming quarters if, as we expect, the US dollar begins to strengthen again".
China's foreign exchange reserves last rose in October, when they stood at $3.53 trillion.