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China August FX reserves rise to US$3.092t

[BEIJING] China's foreign exchange reserves edged up in August for a seventh straight month, though slightly less than market expectations, as tighter regulations and a weaker dollar continued to keep capital outflows in check.

Reserves rose US$10.5 billion in August to US$3.092 trillion, compared with an increase of US$24 billion in July.

Economists polled by Reuters had expected foreign exchange reserves to rise by US$19 billion to US$3.1 trillion.

It is the first time that China's reserves have climbed for seven months in a row since June 2014, and marked the highest level since October last year.

China has tightened rules on moving capital outside the country since late last year it sought to support the yuan currency and stem a slide in its foreign exchange reserves.

It burned through nearly US$320 billion of reserves last year and the yuan still fell about 6.5 per cent against the surging US dollar, its biggest annual drop since 1994.

However, the yuan has seen a sharp rebound this year, thanks to a reversal in the US dollar and a further widening of Beijing's forex controls, including a clampdown on some outbound investment.

The yuan appreciated two per cent in August alone, and has now recouped all of its 2016 losses.

The value of gold reserves rose to US$77.702 billion at the end of August, from US$75.084 billion at end-July, data published on the People's Bank of China website also showed.