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China's June foreign currency reserves rise to highest since April 2018
[HONG KONG] China's foreign-currency holdings rose for a second month amid potential capital inflows and positive valuation effects to the highest level in more than a year.
Reserves climbed to US$3.119 trillion in June from US$3.101 trillion in the previous month, the People's Bank of China said Monday.
The reading beat the median estimate of US$3.110 trillion in a Bloomberg survey of economists.
"There are more inflows" of capital than outflows, as more A shares (China domestic shares) are included in MSCI and more Renminbi Qualified Foreign Institutional Investor (RQFII) quotas are granted, said Iris Pang, an economist at ING Bank NV in Hong Kong.
Foreign investors bought at least 74.7 billion yuan (S$14.7 billion) or more of Chinese bonds in June, according to Bloomberg calculations.
US long-term Treasury yields dropped and the dollar weakened during the month, both pointing to a positive valuation effect.