China’s forex reserves fell less than expected in February to US$3.1 trillion

China’s foreign exchange (forex) reserves – the world’s largest – fell US$8.779 billion in February to US$3.107 trillion, according to the People’s Bank of China

Value of country’s gold reserves rise to US$100.85 billion at end of February, from US$99.24 billion a month earlier

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China’s foreign exchange reserves fell by almost US$8.8 billion in February, according to figures from the central bank. Photo: Xinhua

Published: 1:29pm, 7 Mar 2020Updated: 10:03am, 9 Mar 2020

China’s foreign exchange reserves fell less than expected in February as the yuan weakened on fears over the coronavirus epidemic and its impact on economic activity.

The country’s foreign exchange (forex) reserves – the world’s largest – fell US$8.779 billion in the month to US$3.107 trillion, according to figures from the People’s Bank of China released on Saturday.

Economists had expected the total to fall by US$15.497 billion to US$3.1 trillion, likely due to fluctuations in global exchange rates and the prices of foreign bonds that China holds.

Strict capital controls have helped China keep outflows under control over the past year despite a trade war with the United States and weakening economic growth at home.

But the yuan fell 0.78 per cent against the dollar in February, its first monthly drop since August, while the dollar rose 0.77 per cent as investors shifted money from virus-hit Asia into US assets.

The virus outbreak and strict government measures used to contain its spread likely halved China’s economic growth in the first quarter compared with the previous three months, triggering expectations for more interest rate cuts, according to the latest Reuters poll.

China held 62.64 million fine troy ounces of gold at the end of February, the same as at the end of January.