China Foreign-Exchange Reserves Fall at Slower Pace


China’s foreign-exchange reserves fell to the lowest level in more than four years in February, as the central bank continued to tap into its stockpile of foreign currencies to shore up the yuan.

But the reserves fell at a slower pace last month, helped by Beijing’s latest efforts to restore confidence in the yuan.

The People’s Bank of China said Monday that its foreign-exchange reserves fell by $28.57 billion from the previous month, to $3.202 trillion, following a decline of $99.5 billion in January. It marked the fourth consecutive monthly decline, with the reserves reaching their lowest level since December 2011.

“The smaller decline of foreign-exchange reserves is within market expectations as a stronger yuan helped cushion the outflow pressure,” said Zhang Fan, an economist with RHB Research.

In the past few months, Beijing used its pile of reserves, the largest in the world, to stabilize the yuan after the central bank unexpectedly devalued the currency on Aug. 11, a move it said was aimed at bringing its value more in line with market prices. The move triggered sharp selloffs of the currency as well as concern around China’s currency policies.

In an attempt to dispel such worries, PBOC Gov. Zhou Xiaochuan reiterated to global financial policy makers at a Group of 20 meeting late last month that China won’t engage in competitive devaluation of its currency to lift its exports, and that “there is no basis for persistent yuan depreciation from the perspective of economic fundamentals.”

Mr. Zhou and other central-bank officials have taken extensive steps recently to assure investors both at home and abroad that Beijing has the ability to shore up its currency and that the country’s reserves are abundant enough to help realize that goal.