BEIJING (Feb 27): China's FX regulator said on Monday that it will strengthen supervision of the foreign exchange market in 2017, while improving policy transparency and promoting the further opening of financial markets.

Chinese authorities have taken a raft of steps in recent months to curb capital flight from the country to support the weakening yuan currency, while trying to attract more foreign investment.

Pan Gonsheng, head of the State Administration of Foreign Exchange (SAFE) said that China's foreign exchange market is relatively stable and cross-border capital flows are becoming more balanced, according to a statement posted on its website.

The SAFE recently uncovered a underground bank in the southern Chinese city of Shenzhen involving 50 billion yuan (US$7.27 billion), and cases of firms' using fake documents and fake trade deals to transfer foreign exchange overseas.

China's foreign exchange reserves unexpectedly fell below the closely watched US$3 trillion level in January for the first time in nearly six years.

But the January decline was the smallest in seven months, indicating China's renewed crackdown on outflows appears to be working, at least for now.

A recent pullback in the dollar after a multi-month rally has also helped ease pressure on the yuan and other emerging currencies, though most analysts expect depreciation pressure to resume as soon as the U.S. central bank positions for what could be several interest rate hikes this year.

(US$1 = 6.8755 Chinese yuan renminbi)