Q: The State Administration of Foreign Exchange (SAFE) has released the latest foreign exchange reserves data just now. Could you explain why foreign exchange reserves changed in April 2020? What would you say about the future trends?
A: China posted US$ 3.0915 trillion in foreign exchange reserves as at the end of April 2020, up by US$ 30.8 billion or 1% month on month.
So far this year, facing the challenges from the novel coronavirus epidemic, China has responded with strong measures, achieving significant progress in epidemic prevention and control, and resuming the economic and social order at a faster pace. The supply and demand on China’s foreign exchange market has remained in balance and market players have been sensible. In April, as the epidemic continued to rage across the world, major countries reinforced their monetary and fiscal stimulus, shoring up investor confidence to some extent. As a result, in global financial markets, the US dollar index fell slightly and asset prices in major counties rose. Due to the combined impacts of the currency exchange and changes in asset prices, China’s foreign exchange reserves climbed slightly in the month.
As the epidemic is ravaging around the world, the global economic and financial situations are complex and challenging still. Along with the abatement of the novel coronavirus epidemic in China, the epidemic prevention and control has become a normal. But China’s economy features strong resilience, potentialities and much leeway, and the fundamentals sustaining sound economic growth over the long term will not change, which will continue to underpin the overall stability of China’s foreign exchange reserves.