BOAO, China (Reuters) - An advisor to China’s central bank said on Saturday that he believed the People’s Bank of China (PBOC) would want a smooth transition to holding less foreign exchange reserves.
Fan Gang, director of the National Economic Research Institute, said he believed the PBOC would not want $4 trillion in reserves in the long run.
But neither would it want to go to $2 trillion “in a few days”, said Fan, who is also a member of the PBOC’s Monetary Policy Committee.
Fan was speaking at the Boao Forum for Asia in southern China’s Hainan province.
China’s foreign exchange reserves rose for the first time in eight months in February, poking above the $3 trillion mark.
The unexpected gain helped assuage fears that China would engineer another sharp one-off devaluation of the yuan.
China’s foreign exchange regulator has said reserves are likely to stabilise gradually as pressures on capital outflows ease.
Reporting by Elias Glenn; Writing by Ryan Woo; Editing by Christian Schmollinger