China’s foreign exchange reserves rose again in March after four months of decline

Almaty. April 11. Silkroadnews – Due to devaluation of the US dollar and more stable exchange rate of the Chinese yuan by the end of March 2016 China’s foreign exchange reserves rose $10.258 billion compared to February 2016 to $3.213 trillion, “Xinhua” agency reports.

The data published on Thursday by the People’s Bank (Central Bank) of China shows this is the first time when China reverses four months of decline started in November 2015.

“In 2015 the increase in China’s foreign exchange reserves was only marked in April and October, the downward trend in the foreign exchange reserves got especially strong after the reform of the yuan exchange rate formation mechanism last August, yuan fast devaluation resulted in the outflow of capital abroad. In the first two months of 2016 the reduction of the foreign exchange reserves has slowed followed by a growth emerging in March,” the statement says.

While the trend of capital outflow from the country still remains as a whole, its scale declined significantly, the experts note.

The Central Bank of China also for the first time released the data on the foreign exchange reserves denominated in Special Drawing Rights (SDR) issued by the International Monetary Fund, according to which China’s foreign exchange reserves totaled 2.28 trillion SDR at the end of March.

SDR are more stable than the currency of any particular state or international alliance, explained the Central Bank experts. Fluctuations in rates of major currencies cause the growth or decline of foreign exchange reserves, compared with them SDR can recognize the value of foreign exchange reserves more objectively.
Expanding the use of the SDR, the PBOC, according to the experts, moves toward the direction of further extension in the foreign investors’ access to the Chinese interbank bond market.