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China December forex reserves fall for 6th month, near $3 trillion level

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China foreign exchange reserves fall in December to lowest since February 2011

China foreign exchange reserves fall in December to lowest since February 2011*/

If pressure on the yuan persists, analysts suspect China will continue to tighten the screws on outflows via administrative and regulatory means, while pouncing sporadically on short sellers in forex markets to discourage them from building up excessive bets against the currency.But if it continues to burn through reserves at a rapid rate, some strategists believe China’s leaders may have little choice but to sanction another big “one-off” devaluation like that in 2015, which would likely roil global financial markets and stoke tensions with the new Trump administration.The yuan depreciated 6.6 percent against the surging dollar in 2016, its biggest one-year loss since 1994, and is expected to weaken further this year if the dollar’s rally has legs.
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China December forex reserves fall for 6th month, near $3 trillion level

China December forex reserves fall for 6th month, near $3 trillion level*/

FILE PHOTO – Benjamin Franklin U.S. 100 dollar banknotes and a Chinese 100 yuan banknote with the late Chinese Chairman Mao Zedong are seen in this January 21, 2016 picture illustration.REUTERS/Jason Lee/Illustration/File Photo FILE PHOTO – Benjamin Franklin U.S. 100 dollar banknotes and a Chinese 100 yuan banknote with the late Chinese Chairman Mao Zedong are seen in this January 21, 2016 picture illustration.REUTERS/Jason Lee/Illustration/File PhotoJanuary 7, 2017By Cheng Fang and Sue-Lin WongBEIJING, Jan 7 (Reuters) – China’s foreign exchange reserves fell to near six-year lows in December, but held just above the critical $3 trillion level, as authorities stepped in to support the weakening yuan ahead of U.S. President-elect Donald Trump’s inauguration.
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China December forex reserves fall less than expected to $3.011 trillion

China December forex reserves fall less than expected to $3.011 trillion*/

BEIJING: China’s foreign exchange reserves fell for a sixth straight month in December but by less than expected to the lowest since February 2011, as authorities stepped in to support the yuan ahead of US President-elect Donald Trump ‘s inauguration.Reserves fell by $41 billion last month to $3.011 trillion, central bank data showed on Saturday, following a drop of $69.06 billion in November.Economists polled by Reuters had expected reserves to drop $51 billion to $3.001 trillion, from $3.052 trillion at the end of November.The yuan depreciated 6.6 per cent against the surging dollar in 2016, its biggest one-year loss since 1994, and is expected to weaken further this year despite authorities’ latest attempts to slow its descent.Adding to pressure on the currency, Trump has vowed to label China a currency manipulator on his first day in office on Jan. 20 and has threatened to impose huge tariffs on imports of Chinese goods While the world’s second-largest economy still has the largest stash of forex reserves by far, it has burned through half a trillion dollars since August 2015, when it stunned global investors by devaluing the yuan.If forex reserves continue to be depleted at a rapid pace and capital flight continues, some strategists believe China’s leaders may have little choice but to sanction another big “one-off” devaluation which would roil global financial markets.China’s gold reserves fell to $67.878 billion at end-December from $69.785 billion at end-November.
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