October 9, 2017 / 8:13 AM / in a year

China Sept FX reserves rise to $3.109 trln, slightly more than forecast

BEIJING, Oct 9 (Reuters) - China’s foreign exchange reserves rose modestly in September for an eighth straight month, and by slightly more than markets had expected, as tighter regulations and a stronger yuan discouraged capital outflows.

Reserves rose $17 billion in September to $3.109 trillion, compared with an increase of $10.5 billion in August, central bank data showed on Monday.

Economists polled by Reuters had expected reserves to rise by $8 billion to $3.1 trillion.

It was the first time that China’s reserves have climbed for eight months in a row since June 2014, and marked the highest level since October last year.

China has tightened rules on moving capital outside the country since late 2016 as it sought to support the yuan CNY=CFXS> and stem a slide in its foreign exchange reserves.

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

However, the yuan has seen a sharp rebound so far this year, thanks to a reversal in the dollar and a further widening of Beijing’s forex controls, including a clampdown on some outbound investment.

The yuan had gained 7.5 percent against the dollar through early September, but showed some signs of softening in recent weeks, possibly due to government concerns that its rapid run-up would start to hurt China’s exports.

The value of gold reserves fell to $76.005 billion at end-September, from $77.702 billion at end-August, data on the People’s Bank of China website also showed. (Reporting by Beijing Monitoring Desk; Editing by Kim Coghill)

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