Mubasher: China’s foreign exchange (FX) reserves rose modestly more than expected in January as the Chinese yuan (CNY) strengthened on hopes of progress in trade negotiations between Washington and Beijing.
China’s reserves rose by $15.2 billion last January, the largest gain in a year, to $3.088 trillion, compared with a rise of $11 billion in December, data released by the People’s Bank of China (PBOC) showed on Monday.
Meanwhile, analysts polled by Thomson Reuters projected a rise of $9.3 billion.
The slight increase in China’s reserves last January came on the back of appreciation of non-dollar currencies and the rising prices of financial assets held, the FX regulator said in a statement.
Chinese officials voiced optimism as trade talks resumed with their US counterparts.
However, they criticised a US Navy mission through the disputed South China Sea, casting a shadow over the potential for improved US-Sino dialogue.
While doubts were raised over the possibility that Beijing would agree to Washington’s demands for major structural reforms.
However, both sides could find enough common ground to continue their dialogue and postpone a US tariff hike on Chinese goods due on 1 March.
China has been looking to keep the yuan stable in recent weeks to provide a more favourable atmosphere for the trade discussions, as US President Donald Trump repeatedly complained about Beijing’s managed currency regime, claiming that the currency is being manipulated for trade advantage.
The yuan appreciated 2.6% against the US dollar in January, reaching its highest level in more than 6 months at one point.
By 3:29 pm GMT, the USD/CNY pair climbed 0.70% to CNY 6.7923.