The large positive trade balance “should help offset some of the capital outflow and alleviate some depreciation pressure on the RMB”, said the ANZ analysts.
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Imports fell sharply 14.4 percent year-on-year to 738 billion yuan in January, Customs said, a worsening of the 4 percent decline in yuan terms the month before.
He added that Beijing would use its massive foreign exchange holdings to defend the currency.
A slide in China’s exports in January was eclipsed by an even bigger tumble in imports, leaving a record trade surplus for the world’s biggest trading nation. Along with it he added that weak trade data “hints that it does not make too much sense for China to maintain a strong currency”.
HONG KONG (AP) – Japanese stocks rocketed Monday, leading a global market rally after dismal growth data raised hopes of extra stimulus for the world’s third-biggest economy.
Zhou’s remarks come as Chinese markets prepare to reopen on Monday after a week-long New Year holiday.
PBoC Governor Zhou Xiaochuan said there was no basis for the yuan to keep falling in a weekend interview, and China would keep it stable versus a basket of currencies while allowing greater volatility against the USA dollar.
The yuan surged the most since 2005 against the dollar.
The Chinese yuan is likely to keep appreciating and become a “safe-haven currency” amid global turbulence, a senior economist with China’s central bank has said, after recent strong performance of the yuan.
China’s blue-chip CSI300 index dipped 1.4 per cent, at 2,921.23 points, while the Shanghai Composite Index was down 1.6 per cent, to 2,720.03 points.
The People’s Bank of China set the midpoint rate CNY=SAEC at 6.513 per dollar prior to market open, 0.02 percent softer than Monday’s fix of 6.5118.
Zhou dismissed rumors that China will increase foreign exchange control.
Total foreign trade value in January edged down 9.8 percent year on year to 1.88 trillion yuan.
Analysts said the yen could continue to weaken this year, which would be good for exporters.
European shares followed in their wake, led by a 3 percent rebound in banking stocks.SX7P on news that the European Central Bank (ECB) is in talks to buy bundles of Italian bad bank loans as part of its asset-purchase program.
Median forecasts were for exports to dip 1.9 percent compared to a year earlier, with imports down 0.8 percent.
Broad M2 money supply (M2) in January rose 14.0 per cent in January from a year ago, beating expectations of 13.4 per cent and quickening from December’s 13.3 per cent.
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A fuller reading on how China’s economy has started 2016 won’t be available until next month, when fresh readings on retail sales, investment and industrial output are due.
