Watching China's reserves and fx controls - UOB

Analysts at UOB explained that China’s FX reserves rose US$6.9 bn to $3.005 tn at the end of Feb from US$2.998bn end Jan, registering the first m/m increase since Jun 2016. 

Key Quotes:

"On average, the reserves dropped by US$16.4 bn per month in the past 12 months. The increase in FX reserves was attributed to stronger economic data, stricter capital controls and some stabilisation in the CNY."

"However, the stricter foreign-exchange management has reportedly made it very difficult for corporates to move funds out of China with reports of a sharp drop in foreign deals. According to Bloomberg, Chinese corporates have made US$19 billion of acquisitions abroad so far this year amounting to a 74% drop from a year ago."