Q: The State Administration of Foreign Exchange (SAFE) has just released the latest data on China's foreign exchange reserves. Could you explain why China's foreign exchange reserves changed in August 2020? What will be the future trends?
A: By the end of August 2020, China's foreign exchange reserves had amounted to US$ 3.1646 trillion, up by US$ 10.2 billion or 0.3% month on month.
China's foreign exchange market remained stable in August, with supply and demand being in balance. In global financial markets, due to monetary policy expectations and macroeconomic data in major economies, non-US dollar currencies picked up against the US dollar, and asset prices diverged. Under the combined impacts of exchange rate conversion and asset price changes, China's foreign exchange reserves increased in August.
Currently, the COVID-19 pandemic has not yet been fully under control, and there are still many destabilizing factors and uncertainties in the global economic and financial sectors. However, China's economy is recovering steadily and continuously developing towards the brighter side, and it stays committed to deepening reforms and expanding opening-up. The new development pattern, featured as domination by domestic cycle and mutual promotion between domestic and international cycle, is expected to take shape with a faster pace. Those factors above will provide continued support for the general stability of foreign exchange reserves.