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China's foreign reserves rise following capital controls

China's foreign reserves rise following capital controls

BEIJING (AP) — China's foreign exchange reserves rebounded unexpectedly from a six-year low in February after Beijing imposed controls to stop a flood of capital leaving the world's second-largest economy.

Official data Tuesday showed the reserves rose by a relatively modest $6.9 billion to just over $3 trillion, but private sector analysts had expected them to shrink.

The central bank is spending the reserves to shore up the exchange rate of China's yuan after expectations it would decline led companies and small investors to move money out of the country. The reserves are down from a peak of $3.99 trillion in June 2014.

That outflow prompted Beijing to tighten controls late last year by stepping up scrutiny of proposed foreign investments and banning some activities by individual investors.