China's Foreign Exchange Reserves Rise After April Dip

(Bloomberg) -- China’s foreign-currency holdings resumed rising in May, countering outflow concerns amid a stronger dollar.

• Reserves climbed to $3.101 trillion from $3.095 trillion in April, the People’s Bank of China said Monday

Key Insights

• The reading is slightly higher than the median estimate of $3.09 trillion in a Bloomberg survey of economists
• “There may be some forex outflow pressure - one piece of evidence was that the renminbi fixing rates came in significantly stronger than the forecasts over the past few weeks,” according to a note written by China International Capital Corp economists including Eva Yi
• A worsening trade war and slowing Chinese economy caused a rapid sell-off in the yuan last month and pushed it to near a level not breached since the global financial crisis. The currency resumed its slide offshore on Friday after the central bank chief signaled hinted there’s no line in the sand for the currency and that he’s willing to ease policy to protect the economy from trade-war fallout

Get More

• “There remain plenty of uncertainties in global politics and the economy, and the possibility of global financial market turbulence is rising,” Wang Chunying, spokesperson of the State Administration of Foreign Exchange, said in a statement. “China’s sound economic fundamentals will well support a smooth fx market.”

--With assistance from John Liu.

To contact Bloomberg News staff for this story: Yinan Zhao in Beijing at yzhao300@bloomberg.net

To contact the editors responsible for this story: Jeffrey Black at jblack25@bloomberg.net, James Mayger, Sharon Chen

©2019 Bloomberg L.P.

With assistance from Bloomberg