China’s Forex Reserves Rise to $3.1839 Trillion

Sat Apr 08 2023
icon-facebook icon-twitter icon-whatsapp

BEIJING: the State Administration of Foreign Exchange said that China’s foreign exchange reserves came in at $3.1839 trillion at the end of March, up 1.62 per cent or 50.7 billion dollars from a month earlier.

Affected by monetary policy and expectations for major economies, the dollar index fell, and the prices of world financial assets climbed last month, the regulator said, attributing the rise in foreign exchange reserves to the combined impact of currency translation and asset price changes.

According to APP, it added that China’s foreign exchange reserves are expected to stay generally stable as the state has solid economic foundations and broad prospects for development.

Director, Dong Dengxin of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times that the foreign exchange increase was the major result of dollar depreciation.

Observers said that world investors’ anticipation of dollar depreciation has led to looming recession concerns for the United States economy. Despite the recent banking issues, the Fed shows no sign of reversing the rate hike cycle.

He said that “The Fed’s continued interest rate hikes lastly pushed up the dollar index, but it fell in March as many states, and also including Russia, India and several oil exporters, abandoned the dollar and settled in local currency or the yuan,”

“It indicates that the dollar is facing credit issues, whether represented by the West reducing its holdings of United States debt or developing countries using the local currency for settlement,” Dong noted.

China’s world reserves are composed of gold reserves and foreign exchange reserves. Presently, the state foreign exchange reserves maintain a level of around 3.1 trillion to 3.2 trillion dollars. Dong suggested that the country could cut United States debt holdings to prevent further risks.

icon-facebook icon-twitter icon-whatsapp