Data released by the State Administration of Foreign Exchange (SAFE) on September 7 show that China’s foreign‑exchange reserves stood at USD 3.4383 trillion at end‑August, rising by USD 19.5 billion or 0.57 percent from end‑July, and have remained above USD 3.4 trillion for five consecutive months.

Regarding the continued rebound in foreign‑exchange reserves in August, Guan Tao, Chief Economist at Huafu Securities, told reporters from the Shanghai Securities News that this mainly reflected positive valuation effects from exchange‑rate conversion and asset price movements amid monetary‑policy shifts in major economies and global macroeconomic conditions.

In August, the US Dollar Index fell 0.5 percent to 99.4. Non‑US dollar currencies saw mixed performance: the euro and British pound kept appreciating against the US dollar albeit at a slower pace, while the Japanese yen reversed gains to depreciate by 1.4 percent to around 160 against the greenback. Global major financial assets diverged in price performance: the USD‑hedged global bond index edged up 0.1 percent, and the S&P 500 Index climbed 2.6 percent, halting a two‑month losing streak.

Looking ahead, experts said multiple factors will jointly underpin the general stability of China’s foreign‑exchange reserves.

Wen Bin, Chief Economist at Minsheng Bank, noted that exports are expected to remain resilient and buttress China’s balance of payments. For one thing, the global manufacturing boom driven by AI‑related capital expenditure will persist, lifting both volume and prices across the semiconductor industrial chain and boosting export growth. For another, Chinese foreign‑trade entities keep tapping diversified overseas markets to foster new trade growth drivers. In addition, import growth has stayed robust for five straight months. Coordinated growth in imports and exports helps keep the current‑account balance within a reasonable and balanced range.

On cross‑border capital flows, several capital‑account opening measures took effect in August. According to Wen Bin, the centralized cross‑border renminbi and foreign‑currency fund management scheme for multinational corporations has been rolled out nationwide with improved fund pooling and streamlined registration procedures, further facilitating cross‑border investment and financing. The Hong Kong Stock Exchange officially launched five‑year RMB treasury bond futures, complementing Bond Connect and Swap Connect and enriching overseas investors’ toolkit for interest‑rate risk management. The combination of policy and product improvements is enhancing China’s market appeal to foreign capital.

SAFE stated that China’s economy maintains overall stability with further progress, demonstrating strong resilience and vitality, which underpins the basic stability of foreign‑exchange reserves.

In terms of gold reserves, figures released by the People’s Bank of China on the same day put China’s gold reserves at 76.73 million ounces at end‑August, a month‑on‑month increase of 0.65 million ounces with larger purchases than in July. This marks the 22nd consecutive month of gold reserve increases by China’s central bank.

The World Gold Council recently published an article noting that gold — an asset issued by no sovereign state, free of sovereign‑credit risk and highly liquid — is evolving beyond its traditional role as a safe‑haven asset and strategic allocation, and is emerging as a new core holding in a multipolar era.

Source: Shanghai Securities News