December 7, 2017 / 8:09 AM / a year ago

China Nov FX reserves rise to $3.119 trillion, slightly less than forecast

BEIJING, Dec 7 (Reuters) - China’s foreign exchange reserves rose for a 10th straight month in November, though slightly less than market expectations, as tight regulations and a strong yuan continued to discourage capital outflows.

Reserves rose $10 billion in November to $3.119 trillion, compared with an increase of $700 million in October, central bank data showed on Thursday.

Economists polled by Reuters had expected reserves to rise by $11 billion to $3.120 trillion.

It was the first time that China’s reserves have climbed for 10 months in a row since June 2014, and brought its stockpile — the world’s largest — to the highest since October last year.

Capital flight had been seen as a major risk for China at the start of the year, but a combination of tighter capital controls and a faltering dollar helped the yuan stage a strong turnaround, bolstering confidence in the economy.

The yuan has gained about 5 percent against the U.S. dollar so far this year.

Beijing spent nearly $320 billion of reserves bolstering its economy against outflows last year and the yuan still fell about 6.5 percent against the surging dollar, its biggest annual drop since 1994.

China has tightened rules on moving capital outside the country since late 2016 and has blocked some Chinese firms’ overseas investment deals as it sought to support the yuan and stem the slide in its forex reserves.

The value of gold reserves rose to $75.833 billion at the end of November, from $75.238 billion at the end of October, data on the PBOC website also showed. (Reporting by Beijing Monitoring Desk; Editing by Jacqueline Wong)

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