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China sees current account surplus, volatile capital flows in 2015

[BEIJING] China is likely to maintain a surplus on its current account this year, while cross-border capital flows could become more volatile, the country's foreign exchange regulator said on Monday.

China had a current account surplus of US$219.7 billion in 2014, up 48 per cent from the previous year, the State Administration of Foreign Exchange (SAFE) said in its annual report for 2014.

The US dollar may strengthen as the Federal Reserve is expected to start raising interest rates in the second half of 2015, the SAFE said, adding that it will closely monitor cross-border currency arbitrage activities.

China will also keep diversifying its foreign exchange reserve investment in 2015 and improve profitability, the regulator added.