China's reserves beating forecasts
China's foreign-exchange reserves rose for a third month in April, exceeding estimates, as tighter capital controls kept money from flowing out of the country and the yuan held stable.
Reserves climbed $20.4bn (€18.5bn) to $3.03tn (€2.75tn), the People's Bank of China said, compared with a median estimate of $3.02tn (€2.74tn) in a Bloomberg survey of economists.
"Downward pressure on the currency has significantly subsided thanks to capital controls," said Dariusz Kowalczyk, a senior economist at Credit Agricole in Hong Kong. "This means that going forward, depreciation will be very gradual."
Stricter capital controls, easing currency pressure and the first back-to-back economic acceleration in seven years are shoring up the world's largest stockpile. Still, policy makers propping up the yuan have burned through about a quarter of the reserves, which have declined from a peak of $4tn (€3.63tn) in 2014.
In addition to valuation effects, stronger trade data as well as dented capital outflows should be responsible for this slight rise," said Frederik Kunze, chief China economist at German lender NordLB in Hanover. Yuan declines eased, "which can be seen as good news for foreign-exchange reserves". (Bloomberg)