REPEAT: MNI: China FX Reserves Fall In May On Val Effect: PBOC

Repeats Story Initially Transmitted at 09:45 GMT Jun 7/05:45 EST Jun 7

--China May FX Reserves Fell $14.23 Billion To $3.11 Trillion

     BEIJING (MNI) - China's foreign-exchange reserves shrank modestly in May,

the second consecutive monthly fall, as the appreciation of the dollar weighed,

according to the People's Bank of China and State Administration of Forex

Reserves. 

     FX reserves fell by $14.23 billion to $3.11 trillion as of May 31,

according to data released Thursday by the People's Bank of China (PBOC),

compared with a decrease of $17.97 billion in April. 

     "Demand and supply for foreign exchange and cross-border capital flows

remained relatively stable and balanced in May," the State Administration of

Foreign Exchange (SAFE), a division of PBOC, said on its website Thursday. 

     Non-dollar currencies depreciated against the dollar, as the dollar index

rose 2.3% in May, while the impact on forex reserves was partly cancelled out by

rising asset prices, together contributing to a decrease in the value of China's

FX reserve in U.S. dollar terms, it said.

     SAFE said FX reserves should remain "generally stable" and cross-border

capital flows will remain "generally balanced" as China's economy develops

steadily, despite the uncertainties financial market is facing because of

diverging growth speed for different countries.

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

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com