Q: The latest data released by the People's Bank of China on foreign exchange reserves show that China's foreign exchange reserves as at the end of August decreased by USD 8.2 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves?

A: As at the end of August 2018, China's foreign exchange reserves stood at USD 3,109.7 billion, down by USD 8.2 billion or 0.26% month on month.

In August, the supply and demand of China's foreign exchange market remained stable and the cross-border capital flows maintained a basic equilibrium. Global trade frictions, geopolitical economic situations and other uncertainties continued to intensify, and the US dollar index rose in fluctuation. As a result, China's foreign exchange reserves declined slightly.

Since the beginning of this year, there has been a remarkable increase in international political and economic risk factors, some emerging market economies have suffered from heavy shocks and the international financial market volatility has increased. However, China's foreign exchange reserves remained basic stability, mainly because China's economy maintained stability while ensuring progress and gained momentum for growth, the foreign exchange market operated smoothly and the flexibility of RMB exchange rate was further enhanced.

Looking ahead, in spite of the complex international environment and rising uncertainties on financial markets, China's economy is expected to maintain the fundamentals of good resilience, strong adaptability and much leeway to improve. In the meanwhile, firmly adhering to the goal of reform and opening-up will be conducive to maintaining the adaptive equilibrium of the balance of payments. Under such factors at home and abroad, China's foreign exchange reserves are expected to remain stable in fluctuation.