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China's Feb net FX sales lowest in 9 months as yuan steadies
March 14, 2017 / 8:52 AM / 9 months ago

China's Feb net FX sales lowest in 9 months as yuan steadies

BEIJING (Reuters) - China’s central bank in February sold the smallest amount of foreign exchange in nine months, supporting the government’s assertions that capital outflows are easing amid tighter scrutiny of cross-border flows.

Net foreign exchange sales by the People’s Bank of China (PBOC) amounted to 58.1 billion yuan ($8.40 billion) last month, according to Reuters calculations based on central bank data released on Tuesday.

That compared with net sales of 208.8 billion yuan in January and 227.9 billion yuan in February 2016.

China's yuan CNY=CFXS has steadied this year after falling 6.5 percent last year. PBOC Governor Zhou Xiaochuan said last week market expectations of the yuan's movements have shown "big changes" this year as China's economy stabilizes.

Zhou said he expected the yuan to be basically stable this year, while conceding that some fluctuations are normal.

But the yuan faces another test with the U.S. Fed Reserve expected to raise rates this week, as many analysts say the yuan is likely to fall again if the dollar strengthens on the back of higher U.S. interest rates.

China’s foreign exchange reserves unexpectedly rebounded back above $3 trillion in February due to fund outflow curbs and the steadying yuan.

Reporting by Beijing Monitoring Desk and Elias Glenn; Editing by Richard Borsuk

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