Q: The latest foreign exchange reserves data disseminated by the People's Bank of China show that China's foreign exchange reserves for May dropped by USD 14.2 billion month on month. Could you tell us why? What will be the future trends of foreign exchange reserves?

A: As at the end of May 2018, China's foreign exchange reserves recorded USD 3.1106 trillion, down by USD 14.2 billion or 0.46% month on month.

China's foreign exchange market performed stably in May. The US Dollar Index in global financial markets picked up by 2.3%, because non-USD currencies declined against the US dollars, but asset prices rose. As a result, China's foreign exchange reserves fell slightly.

In the year to date, China's economy has gained momentum for growth. To be specific, production demand rose steadily, employment and prices remained stable, economic structure was optimized and upgraded, and quality benefits were improved. The foreign exchange supply and demand has remained balanced, and cross-border capital flows of market participants have found an equilibrium.

Looking ahead, China's economy will be fully able and sophisticated to maintain stability with a strong momentum for growth. On that basis, China's foreign exchange market will adapt better to changes in external environment and continue the landscape of rational and balanced cross-border capital flows. On the other hand, as the global economy continues to recover, economies' growth will be diverged, indicating the financial market will still be faced with uncertainties. Under such factors at home and abroad, China's foreign exchange reserves are expected to stay stable.