(Bloomberg) -- China’s foreign-currency holdings dropped for a third straight month in March as the dollar strengthened and global bond yields rose.
- Reserves fell to $3.17 trillion from $3.205 trillion in February, the People’s Bank of China said Wednesday in a statement.
- The reading is lower than the median estimate of $3.178 trillion in a Bloomberg survey of economists
- The dollar strengthened to its highest level since November on March 30, according to the Bloomberg dollar spot index, amid optimism over U.S. economic recovery. A rising dollar means the value of assets in other currencies would have dropped
- The drop was a result of a combination of factors including the rising dollar index, declines in major bond markets, as well as gains in global stock markets, said Wang Chunying, spokesperson for China’s State Administration of Foreign Exchange. While the overseas pandemic situation remains grim, China’s economic growth momentum has been strengthening and this will help keep the reserves stable, Wang said in a statement
- The value of gold reserves declined to $105.93 billion
- The yuan has weakened by 1.8% against the dollar since the end of January, after advancing rapidly against the greenback for much of last year
- China’s capital markets attracted huge foreign inflows in 2020, prompting concerns among officials who warned recently of dangers related to hot money amid spiking U.S. Treasury yields this year
- China End-March Forex Reserves at $3.17003T; Est. $3.1780T
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