BEIJING, March 10 Falls in China's foreign
exchange reserves are normal and not unfavourable, the country's
central bank governor said on Friday.
China's foreign currency reserves, the world's largest, had
declined for seven straight months through January, before a
small increase in February, as the central bank intervened to
support a weakening yuan.
The country will not overreact to a decline in the forex
reserves, said People's Bank of China head Zhou Xiaochuan on the
sidelines of the annual parliament session in Beijing.
Zhou also said cross-border capital flows will be generally
balanced in the future, adding that it is necessary to have
policy guidance on outbound investment.
China has faced persistent capital outflows as expectations
remain for the yuan to weaken, leading companies and individuals
to move money out of the country.
A fixed exchange rate is not favourable for structural
adjustment, Zhou said on Friday.
(Reporting by Kevin Yao and Yawen Chen; Editing by Richard