China forex reserves fall to US$3.17t in March

Xinhua
China's foreign exchange reserves shrank to US$3.17 trillion at the end of March from US$3.205 trillion at the end of February, official data showed yesterday.
Xinhua

China’s foreign exchange reserves shrank to US$3.17 trillion at the end of March from US$3.205 trillion at the end of February, official data showed yesterday.

The amount fell 1.09 percent from the end of February, according to the State Administration of Foreign Exchange.

In March, China’s forex market functioned stably, with the supply and demand of foreign exchange basically in balance, said SAFE spokesperson Wang Chunying.

The scale of China’s forex reserves has remained over US$3.1 trillion for 11 consecutive months, said Wen Bin, a chief analyst at China Minsheng Bank, adding that although the scale dropped at the end of March, it is still relatively high compared with readings in recent years.

Affected by factors such as the COVID-19 pandemic, the development of COVID-19 vaccines and expectations of major countries’ fiscal and monetary policies, the dollar index saw an increase, while bond prices of major countries fell last month, Wang added.

The spokesperson attributed the decline in forex reserves to the combined effects of currency translation and changes in asset prices. It is normal for the size of forex reserves to fluctuate with the change of valuation, Wen stated.

Wang expects the scale of China’s forex reserves to remain generally stable, despite uncertainties in the international financial market.

Wen also noted that China’s forex reserves will remain stable, supported by continuous recovery in its economy and the increase in global demand.

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