EQUITYWORLD FUTURES, China’s foreign exchange reserves continue to fall within the last six months. Any foreign exchange reserves figure bamboo curtain country walk to the lowest point since February 2011.
CNBC, citing a Monday (9/1/2017), declining foreign exchange reserves China is the impact of the policy to support the exchange rate of the yuan ahead of the inauguration of President-elect US Donald Trump.
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The data show that in December 2016, China’s foreign exchange reserves dropped 41 billion us dollars. Analysts predict a decrease in foreign exchange reserves could reach 51 billion us dollars. For the year 2016 as a whole, China’s foreign exchange reserves dropped by almost 320 billion us dollars into 3.011 trillion us dollars.
Although the reserves figures are still large enough for China, but the concern is growing in the global financial market related speed descents, in line with the country issuing ammunition to defend the exchange rate and prevent capital flows out.
Some analysts estimates that China should at least maintain minimum foreign exchange reserves figure is between 2.6 trillion up to 2.8 trillion u.s. dollars under the limit of adequacy that are assigned to the International Monetary Fund (IMF).
Prevent pressure on the yuan, some time ago the Chinese authorities tightened the capital flow of space out either with administrative or policy regulatori. In addition, the Chinese Government also firmly crack down on parties who speculate against the yuan.
The exchange rate of the yuan weakened 6.6 percent against the U.S. dollar by 2016. This is a weakening of the worst since 1994 and diekspektasikan continue to weaken in the year 2017, if the U.S. dollar continues to perkasa. “For the whole of our 2016 estimates capital flows that come out approximately 710 billion u.s. dollars.
Estimation capital flows out in November and December (2016) only reaching each of the 76 billion and 66 billion us dollars, “said economists at Capital Economics, China Chang Liu.
Financial regulators in China stated the main reason China’s foreign exchange reserves shrank by 2016 is because the central bank use it for stabilization of exchange rates of the yuan.
With the rise of the U.S. dollar, then there is a decline in the value of other currencies held by China. | PT Equityworld Futures