China’s foreign exchange reserves declined below the $3 trillion mark for the first time since 2011 in January, figures from the People’s Bank of China showed Tuesday.
Reserves decreased $12.3 billion to $2.99 trillion in January despite measures taken to curb capital outflow.
This decline will likely spark renewed debate over how long the PBoC can continue intervening to support the renminbi, Julian Evans-Pritchard, a China economist at Capital Economics, said.
The economist assessed that the PBoC can afford to keep selling FX at the current pace for a long time.
He said reserves remain sufficiently large not to warrant any immediate concerns over the sustainability of exchange rate intervention by the People’s Bank, particularly given that capital outflows appear to have eased recently.
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