August 7, 2018 / 8:33 AM / 4 months ago

China July FX reserves rise to $3.118 trln despite trade tensions

BEIJING, Aug 7 (Reuters) - China’s foreign exchange reserves unexpectedly rose in July even as worries over escalating trade tensions between the United States and China have caused market volatility.

Reserves rose $5.82 billion in July to $3.118 trillion, compared with a rise of $1.51 billion in June, central bank data showed on Tuesday.

Economists polled by Reuters had expected reserves to drop by $12.1 billion to $3.100 trillion.

The yuan has fallen 6.3 6 percent since June 14, due to escalating trade tensions with the United States, fanning fears of fresh capital outflows, which eased in 2017 after China imposed tighter capital controls.

The yuan weakened for a fourth straight month in July, the longest such streak since early 2015.

On Friday, China’s central bank said it would set a reserve requirement ratio of 20 percent from Monday for financial institutions settling their forward foreign exchange sales to clients, a move to stabilize the yuan.

The value of China’s gold reserves fell to $72.324 billion at the end of July, from $74.071 billion at the end of June. (Reporting by Kevin Yao and Cheng Fang; Editing by Richard Borsuk)

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