China Foreign-Currency Reserves Stabilized at $3.2 Trillion

  • Number from PBOC in line with analysts’ median estimate
  • Stable July data a register of progress on FX policy: analysts

China Sees More Signs of Stabilization

China’s foreign-exchange reserves were little changed in July as the central bank burned less of the hoard to defend its currency and weakness in the dollar helped to boost valuations.

The reserves edged down by $4.1 billion to $3.2 trillion, the People’s Bank of China said in a statement on Sunday. That was in line with the median estimate of economists surveyed by Bloomberg.

The stabilization suggests capital-outflow pressures eased. The yen and the euro strengthened last month, aiding the dollar valuation of the stockpile, on haven demand amid Britain’s vote to leave the European Union.

"Stable reserves, despite a month of major moves for the yuan, are a register of progress for the PBOC in changing market views on the exchange rate," Bloomberg Intelligence economists Fielding Chen and Tom Orlik wrote in a note. "July’s data bode well for the PBOC’s capacity to manage a more market-set exchange rate without a repeat of earlier stress."

Reserves denominated in the International Monetary Fund’s Special Drawing Rights units stood at 2.30 trillion in July compared with 2.29 trillion in June.

— With assistance by Xiaoqing Pi

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