Q: The State Administration of Foreign Exchange (SAFE) has just released the latest data regarding China’s foreign exchange reserves. Could you explain the causes for the changes in foreign exchange reserves of September 2022? What will be the future trends?

A: By the end of September 2022, China’s foreign exchange reserves stood at USD 3.029 trillion, down by USD 25.9 billion, or 0.85%, from the end of August.

In September, China’s cross-border capital flows were stable as a whole, and the domestic supply and demand of foreign exchange remained in basic balance. In the international financial market, influenced by factors like monetary and fiscal policies as well as macroeconomic data of major countries, the US dollar index rose further and the global financial asset prices fell sharply. China’s foreign exchange reserves declined slightly this month due to the combined effects of currency translation and asset price changes.

At present, with the external environment becoming more complex and severe, destabilizing factors and uncertainties are on the rise in the global economy and the international financial market is highly volatile. However, China’s economy has continued with its steady recovery, and China sustained its strong resilience, enormous potential, and vast room for maneuver in economy with its fundamentals of sound long-term growth unchanged, which will support the overall stability of the foreign exchange reserves.