Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China show that China's foreign exchange reserves for February 2018 fell by USD 27 billion month on month. Could you brief us on the causes of such changes? What are the trends in foreign exchange reserves for the future?

A: As at the end of February 2018, China's foreign exchange reserves hit USD 3.1345 trillion, down by USD 27 billion or 0.85% month on month.

In February, China posted stable cross-border capital flows and trading behaviors of domestic and foreign players, indicating the foreign exchange market maintained a basic equilibrium. Under the combined impact of heightened volatility in global financial markets, adjustments in foreign exchange rates, callback of asset prices, and the depreciation of major non-USD currencies against the USD, China's foreign exchange reserves declined slightly.

Currently, China's economy sustains medium and high-speed growth and the supply-side structural reform is being advanced, presenting a good picture where growth and quality, structure and benefits are mutually complementary. The development trend that two-way cross-border capital flows will remain generally balanced has taken shape in China.

Looking ahead, China's economy will be capable and mature to continue stable development with a strong momentum for growth. Spurred by fundamentals, the two-way fluctuations of RMB exchange rate will become a normal, which is favorable for the two-way and generally balanced cross-border capital flows in the medium and long term. On the other hand, the global economy will continue to recover, and major central banks will tighten their monetary policies, leading to heightened uncertainties in the financial market. Under the effect of both domestic and foreign factors, China will see stable foreign exchange reserves in the future.