Forex reserves in July slip slightly, halting streak
Print Edition
China’s foreign exchange reserves came in at US$3.1037 trillion at the end of July, official data showed yesterday.
The amount increased by US$31 billion, or 1 percent from the beginning of 2019, according to the State Administration of Foreign Exchange.
It went down slightly from US$3.1192 trillion at the end of June, ending a two-month rising streak.
The exchange rates of major currencies against the US dollar fell in July while global bond indices went up as the result of various factors including the global trade situation, monetary policies of central banks and geopolitics, said SAFE spokesperson Wang Chunying.
Wang said the forex reserves decline in July was normal fluctuation considering stable cross-border capital flows and balanced supply and demand in China’s forex market.
“The US dollar index surged nearly 2.5 percent in July, leading to substantial depreciation of major non-US dollar currencies and the monthly decline in China’s forex reserves last month,” said Zhao Qingming, chief economist of a research institute under the China Financial Futures Exchange.
The balance of cross-border capital flows and the rising asset prices due to the Fed rate cut partly offset the negative influence on China’s forex reserves by a strong US dollar, Zhao added.
Wang said the forex regulator would maintain the continuity and stability of forex policies and continue to open up the country’s financial sector.
China has a world-leading bond and stock market in terms of their size, yet foreign investment accounts for only 2 percent and 3 percent, respectively, leaving plenty of room for growth, said Wang. “We will continue to build a sound investment environment for overseas investors, including those from the United States, to invest in renminbi assets,” she said.
The data also showed China’s gold reserves rose for an eighth straight month in July to 62.26 million ounces, up 320,000 ounces month on month.
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