THE country’s annual foreign exchange reserves fell for the third time in four years in 2018 as the yuan came under strong selling pressure from the cooling economy and Sino-U.S. trade tensions.

Depreciation pressure on the yuan is likely to persist this year as China is expected to roll out more policy easing measures to reduce the risk of a sharper slowdown.

China’s foreign exchange reserves — the world’s largest — fell by US$67.24 billion last year to US$3.073 trillion, central bank data showed Monday. That compared with a US$129.4 billion increase in 2017 to US$3.14 trillion.

In December, reserves rose by US$11 billion, after a rise of US$8.6 billion in November. The latest gain was slightly above forecasts of US$8 billion by economists in the latest poll.

The country’s foreign exchange regulator attributed the increase to valuation effects due to the appreciation of non-U.S. dollar currencies and increases in prices of major countries’ bonds held by China.

Reserves are likely to remain generally stable in 2019, the State Administration of Foreign Exchange said in a statement.

The yuan rebounded 1.3 percent against the U.S. dollar in December as the greenback faltered and Washington and China agreed to resume negotiations to end the trade dispute.

But the Chinese currency still fell 5.3 percent for 2018 as a whole, its fourth annual loss in five years.

Meanwhile, after a hiatus of more than two years, China is adding to its gold reserves again.

The People’s Bank of China increased holdings to 59.56 million ounces by the end of December, or about 1,853 tons, from 59.24 million ounces previously, according to data on the central bank’s website.

They had been unchanged since about 130,000 ounces were added in October 2016.

The world’s biggest producer and consumer boosted holdings of bullion in a month marked by mounting concerns that the trade dispute is threatening economic growth. Spot gold had its strongest month in almost two years as those fears spurred gyrations in equities and the U.S. dollar and boosted demand for the precious metal as a haven.

China has previously spent long periods without revealing increases in gold holdings. When the central bank announced a 57-percent jump in reserves to 53.3 million ounces in July 2015, it was the first update in six years.

(SD-Agencies)