China’s foreign exchange reserves scored a four-month rising streak in July as the country made major progress in coordinating COVID-19 control and social and economic development.
The country’s foreign exchange reserves expanded to 3.1544 trillion U.S. dollars at the end of July, from 3.1123 trillion dollars at the end of June, official data showed on Friday.
The amount rose by 42.1 billion dollars, or 1.4 percent, from the end of June, according to the State Administration of Foreign Exchange (SAFE).
The hike of forex reserves was a result of multiple factors, including exchange rates and changes in asset prices, said Wang Chunying, a spokesperson for SAFE.
“As major economies stepped up fiscal stimulus and maintained their loose monetary policies, non-dollar currencies strengthened, and overall asset prices in these countries went up,” said Wang.
Echoing Wang’s sentiments, Wen Bin, chief analyst at China Minsheng Bank, noted that the pick-up of the country’s foreign trade also contributed to the expansion of July’s forex reserves.
Despite the achievements that China obtained in coordinating COVID-19 control and social and economic development, the international economic and financial situation remains grave and complex, with instabilities and uncertainties still prominent, Wang said.
Wang also noted that China’s strong economic resilience, and the accelerated establishment of a “dual circulation” development pattern, which takes the domestic market as the mainstay while domestic and foreign markets can boost each other, would be conducive to shoring up the scale of forex reserves.
The fundamentals for China’s long-term sound development stayed unchanged, Wen said, adding that the short-term stability of foreign exchange reserves could be guaranteed, given that renminbi assets remained attractive to foreign investors.
forex File photo:VCG
