China's forex reserves rise for fourth straight month

A teller counts and arranges dollar notes at an Agricultural Bank of China branch in Qionghai, Hainan province. MENG ZHONGDE / FOR CHINA DAILY

BEIJING - China's foreign exchange stockpile expanded for the fourth month in a row in May after capital flight pressure eased and the value of the renminbi strengthened.

The forex reserves stood at $3.05 trillion at the end of May, an increase of $24 billion from that recorded at the end of April, the State Administration of Foreign Exchange (SAFE) said.

SAFE attributed the continuous rise of forex reserves to stable cross-border capital flow and appreciation of the non-US dollar assets following a weaker US dollar.

A rapid fall of the reserves and a weaker yuan against the US dollar since mid-2015 had raised concerns about the vulnerability of China's financial system.

As China's economy stands on a firmer footing and the government moves to stem illegal capital flight, the stockpile began to increase steadily from February.

SAFE also released figures on the country's gold reserves, which amounted to $75 billion by the end of May, almost on par with a month earlier.

It sees a stable outlook for foreign exchange reserves on the back of a stable economy with rich potential and resilience and the emergence of new growth drivers.

With the country opening its financial market wider to the outside world, cross-border capital flow will have a firmer base for stable and balanced activities, it added.

China's economy expanded 6.9 percent in the first quarter of the year, up from the 6.8-percent growth in the previous quarter and 6.7 percent for 2016. The government has targeted annual growth of around 6.5 percent for 2017.