China's Forex reserves likely to decline this year: Report

BEIJING: With the economy facing a downturn due to falling exports and rising imports, China's foreign exchange reserves, the largest in the world, are expected to decline this year, state-run People's Daily reported.

China's foreign reserves rose by $384.8 billion last year, the lowest in the past five years, the daily said.

The reserves were expected to decline this year. The reserves at present were estimated to be around $3.20 trillion, it said.

The falling growth rate is due to adjustment of the exchange rate policy by the Chinese financial sector and expectation of devaluation of yuan by international speculative capital, it added.

Chinese forex reserves will continue to decrease in 2012, Lian Ping, chief economist at Chinese Bank of Communications, said.

China's economy is no longer as heating as in the past, and that is the main reason among others why Chinese exchange reserves are dwindling, he said.