China’s forex reserves rise to $3.22 trillion

The article reports the recent improvement in the Foreign Exchange Reserves position in China. This reverses the trend of large capital outflows in the past few months on account of economic slowdown in China and Depreciating Yuan against the US dollar.Improved market sentiment and stable Economic Indicators in China coupled with a comparative weak Dollar has reduced the rate of depreciation of Yuan.

Topics include Depreciation, Managed Float Exchange Rate system, Balance of Payments, Capital Account and Effects of Depreciation on the International Trade and economic Growth of the country. Also discuss the causes and the expected effects of Capital Outflows in a recessionary economy using the change in Exchange Rate diagrams .

Evaluation will cover effect of Balance of Payments and depleting Foreign Exchange Reserves and Current Account Deficit on the Chinese Economy with emphasis on Domestic Producers, Consumers and Government.