China’s Forex Reserves Edged Up in October as US Dollar Dips(Yicai Global) Nov. 8 -- China’s foreign exchange reserves inched up in October from the month before, ending two months of declines, due to a slight depreciation in the US dollar and other factors, according to the latest data.
China’s forex reserves came to USD3.2176 trillion at the end of October, adding USD17 billion from September, the State Administration of Foreign Exchange said on Nov. 7. This is the sixth straight month that the holdings have stayed above USD3.2 trillion.
The US dollar index dropped 0.1 percent to 94.1 which has the effect of strengthening non-dollar currencies, said SAFE spokesperson Wang Chunying. As a result, China’s foreign currency holdings, made up of a mixed bag of currencies, gained. The British pound rose 1.5 percent while the euro dropped 0.2 percent and the Japanese yen fell 2.3 percent.
There was also a varied performance in the value of financial assets in major economies, affected by the ongoing Covid-19 pandemic and monetary policies. The Standard & Poor’s 500 Index rose 6.9 percent, the Euro Stoxx 50 Index advanced 5 percent, while the Nikkei 225 index slumped 1.9 percent.
Foreign reserves will continue to remain stable boosted by real trade and cross-border capital flows, said Wen Bin, chief researcher at China Minsheng Bank. China’s exports maintained rapid growth on strong overseas demand. Also, net fund inflows from Hong Kong into the Chinese mainland exceeded CNY30 billion (USD4.7 billion) in October.
International investors remain optimistic about Chinese yuan assets and securities investments maintain net inflows all of which will help to maintain a basic balance between forex supply and demand and international income and expenses, Wen said.
Sporadic outbreaks of the Covid-19 pandemic pose many challenges to global economic recovery and the international financial market is volatile, Wang said. But China’s economy continues to bounce back with strong resilience and great potential, which will provide support for the overall stability of forex reserves.
Editor: Kim Taylor
