China's Foreign Exchange Reserves Continue To Rise

China's Foreign Exchange Reserves Continue To Rise

China End-November Foreign-Exchange Reserves $3.119 Trillion vs $3.109 Trillion at End-Oct

The yuan rose slightly against the dollar in November, making it a almost 5% increase so far this year.

China's forex reserves rose for the 10th month in a row to 3.1193 trillion USA dollars at the end of November, data from the central bank showed Thursday.

Market watchers see a yuan level of 7 against the dollar, as a key touchstone for sentiment in the near term.

China's central bank and commercial lenders recorded net purchases of foreign exchange in September and October, reversing a trend of net sales stretching back almost two years.

The yuan's surge this year has helped increase foreign purchases of Chinese bonds and stocks but authorities might have got a bit queasy as Beijing has long stated that it seeks two-way fluctuation in the Chinese currency.

The People's Bank of China set the yuan parity rate against the dollar at 6.6218 on Friday, compared to the previous close of 6.6140. Economists polled by The Wall Street Journal had expected a rise of $13 billion.

"Looking ahead, I think capital controls are still necessary given the depreciation pressure on the yuan could be very big next year", said Tang Jianwei, an economist at Bank of Communications in Shanghai.

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