Q: The State Administration of Foreign Exchange (SAFE) has just released the latest data on China’s foreign exchange reserves. Could you explain the causes of changes in foreign exchange reserves for May 2021? What will be the future trends?
A: By the end of May 2021, China’s foreign exchange reserves recorded US$3.2218 trillion, up by US$23.6 billion or 0.74% month on month.

In May 2021, China’s foreign exchange market remained stable, witnessing rational and orderly market transactions. In global financial markets, non-US dollar currencies generally strengthened, and the financial asset prices of major countries rose, due to the impact of COVID-19 pandemic and vaccinations, monetary policies of major countries, inflation expectations, and macroeconomic data. Under the combined effect of foreign exchange rate conversion and asset price changes, China’s foreign exchange reserves which are priced by US dollar increased in this month.

As the rest of the world still battle against COVID-19, the global economic and financial situation will continue to face rising uncertainties. But China’s economy will continue to recover steadily this year and the momentum of development will continue to strengthen, which will provide support for a generally stable foreign exchange reserve level.