Chinese foreign exchange reserves likely to have risen in January

China’s foreign exchange reserves are expected to have risen modestly in January for the first time in seven months. This is most likely due to favorable valuation effects. In January, almost all the major reserve currencies appreciated against the U.S. dollar. This probably added USD 15 billion to USD 20 billion to the face value of China’s FX reserves, according to a Societe Generale research report.

In the meantime, the People’s Bank of China appeared to have intervened less, as the depreciation pressure on the RMB eased after the liquidity rout in the CNH market and  the dollar weakness in general, stated Societe Generale.