July 7, 2020 / 9:05 AM / a month ago

UPDATE 1-China's June forex reserves rise less than expected on buoyant yuan

(Adds details, comments)

* June forex reserves climb $10.64 bln to $3.112 trln

* June rise due to asset price gains, dollar fall - regulator

* Value of gold reserves rise to $110.76 bln in June

By Judy Hua and Kevin Yao

BEIJING, July 7 (Reuters) - China’s foreign exchange reserves rose less than expected in June as the yuan strengthened and global asset prices rebounded amid a recovery in economic sentiment.

The country’s foreign exchange reserves - the world’s largest - rose $10.64 billion in June to $3.112 trillion, central bank data showed on Tuesday. Reserves stood at $3.102 trillion in May.

Economists polled by Reuters had expected the country’s reserves to rise by $18.31 billion.

The increase in June reserves was due to a rise in international asset prices and a slight drop in the dollar index, as major economies implemented monetary and fiscal stimulus policies to cope with the coronavirus pandemic, the foreign exchange regulator said in a statement.

Foreign inflows into Chinese stocks and bonds have been strong recently as investors bet on an economic rebound. Strict capital controls have also largely helped China keep outflows under control over the past year despite the shock from the coronavirus outbreak, a prolonged trade war with the United States and weakening economic growth.

The yuan rose 0.99% against the dollar in June, while the dollar fell about 0.97% in the same month against a basket of other major currencies.

China burned through $1 trillion of reserves supporting the yuan in the last economic downturn in 2015, which also saw it devalue the currency in a surprise move.

The People’s Bank of China has already rolled out a raft of easing steps since early February, including bank reserve requirement cuts and targeted lending support for virus-hit firms.

The central bank cut the re-discount and re-lending rates by 25 basis points as of July 1 to reduce funding costs for smaller firms and rural sectors.

China’s economy is gradually emerging from a sharp 6.8% contraction in the first quarter, with much of the country now reopened after disruptions early in the year due to strict lockdown measures.

China held 62.64 million fine troy ounces of gold at the end of June, unchanged from end-May.

The value of China’s gold reserves rose to $110.76 billion at the end of June from $108.29 billion at end-May.

Editing by Jacqueline Wong

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below