REPEAT: China Forex Reserves Rise Slightly In October

Repeats Story Initially Transmitted at 10:43 GMT Nov 7/05:43 EST Nov 7

--9th Straight Monthly Gain

     BEIJING (MNI) - Balanced cross-border capital flows helped nudge up China's

foreign-exchange reserves in October, the ninth straight month that forex

reserves have increased. 

     Foreign-exchange reserves increased $703 million during the month to

$3.1092 trillion, the highest level since last October but much lower than the

$16.98 billion rise in September, according to data released Tuesday by the

People's Bank of China (PBOC).

     "In October, cross-border capital flows and transactions became more

balanced, and the supply and demand of foreign exchange was overall balanced,"

the State Administration of Foreign Exchange (SAFE) said on its official website

on Tuesday. "In the international financial market, non-dollar currencies

depreciated against the dollar while asset prices in general appreciated,

helping the level of foreign-exchange reserves to remain stable."

     The dollar index rose from 93.07 on Sep. 29 to 94.57 on Oct. 31.

     Traders agreed that capital flows were balanced in October.

     "In October, if the yuan depreciated, many people would buy yuan, and when

the yuan appreciated, many people would sell yuan. The market is very balanced,"

said a Shanghai-based forex trader at a commercial bank. "Currently, our clients

do not want to bet on the one-sided appreciation or depreciation of the yuan."

     SAFE expects the forex reserve situation to remain stable in the future.

     "With the success of the 19th National Congress, both domestic and foreign

investors will have more confidence in the long-term development of China's

economy. The foundation for stable cross-border capital flows and international

payments will be even firmer, which will be conducive to helping forex reserves

remain at a relatively stable level," SAFE said.

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com