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Risks from cross-border capital flow controllable: regulator

Xinhua, January 21, 2016 Adjust font size:

China's foreign exchange regulator on Thursday dismissed concerns about massive amounts of capital moving out of the country, stressing risks from the flows are "generally within control."

The State Administration of Foreign Exchange (SAFE) cited China's continued current account surplus and the world's largest foreign exchange reserves as solid support for the country to secure the balance of international payments.

"The impacts of capital outflows on domestic liquidity and financial operations are controllable," SAFE added.

Concerns about capital outflows have been exacerbated as the Chinese currency, the yuan, had been heading south since the central bank revamped the foreign exchange mechanism in August to make the rate more market-based.

China's foreign exchange reserves posted the sharpest monthly fall on record in December, falling to 3.33 trillion U.S. dollars, the lowest level in more than three years.

Despite the continuing drop, China's foreign exchange reserves remain ample enough to guard against external shocks, SAFE reiterated.

It pledged to step up monitoring and analysis of cross-border capital flows to prevent potential risks. Endi