China's forex reserves up nearly $9 billion at $3.099 trillion in March

Figures released by the People’s Bank of China on Sunday showed Chinese foreign exchange reserves, the world’s largest, rose by $8.6 billion or 0.3 per cent in March to $3.099 trillion.

This despite a 5.3 per cent fall of the Chinese currency against the US dollar last year as bilateral trade relations deteriorated. In March, the yuan fell 0.3 per cent against the dollar due to the strength of the greenback. The dollar was up 1 per cent against a basket of major currencies.

The value of China’s gold reserves fell slightly to $78.525 billion from $79.498 billion at the end of February.

And, after an initial shock, however, the Chinese economy rebounded and is up 2 per cent in 2019, on hopes of an end to the debilitating trade war. Last week China resumed trade talks with the United States to secure a pact that would end a tariff battle that has roiled global markets.

The State Administration of Foreign Exchange (SAFE), meanwhile, said the economy is expected to maintain reasonable growth and improved flexibility in the yuan exchange rate and that the country's forex reserves will remain stable.

The outlook for the dollar is expected to remain soft after the Federal Reserve last month abandoned projections for further interest rate hikes this year on signs of an economic slowdown in the United States.

Assuming continued dollar weakness and progress in trade talks, the yuan will likely hold on to its recent gains and appreciate modestly over the coming year, according to analysts in a new Reuter’s poll. It last traded around 6.72 to the dollar.