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 for April 2021 changed? What would you say about the future trends of China’s foreign exchange reserves?

A: By the end of April 2021, China’s foreign exchange reserves recorded US$3.1982 trillion, up by US$28.2 billion or 0.89% month on month.

We saw a stable performance in foreign exchange market in April, featuring balanced supply and demand. In global financial markets, due to the COVID-19 pandemic and progress in vaccine development, as well as monetary policy expectations of the major countries and their macroeconomic data, non-US dollar currencies rose against the US dollar, and the overall price of financial assets of major countries have increased. China’s foreign exchange reserves climbed in the month, under the combined effect of foreign exchange rate conversion and asset price changes.

As the rest of the world continue to grapple with COVID-19, the global economic recovery and global financial markets still face many uncertainties and destabilizing factors. However, since the beginning of this year, China’s economy has got off to a good start. The high-quality development has made new achievements and the renminbi exchange rate has become more flexible, which will be favorable for maintaining the general stability of China’s foreign exchange reserves.