Q: The latest data on foreign exchange reserves disseminated by the People's Bank of China show that China's foreign exchange reserves by the end of May 2017 rose by USD 24 billion month on month. My question is what caused such changes in foreign exchange reserves.
A: As at May 31, 2017, China's foreign exchange reserves amounted to USD 3.0536 trillion, up by a slight USD 24 billion or 0.8% month on month, representing the fourth consecutive month of growth.
In May, China's cross-border capital flows continued to be stabilized, presenting a good momentum, while the supply and demand of foreign exchange remained in an equilibrium. Globally, the financial markets were volatile, the non-USD currencies against the US dollar appreciated, and asset prices rose. Due to the combined effect of these factors, China registered recovery of foreign exchange reserves.
Since the beginning of this year, China's economic performance has remained within the reasonable range. It also has borne witness to more positive changes such as higher quality, optimized structure, stronger potential and dynamism, and wider space, and the emergence of more factors that support the mid to high-speed economic growth and its efforts to march toward the medium and high level of economic development. All these show that China's economy has become more robust in making progress while maintaining stability. The global financial markets have been operated more stably, while China's cross-border capital flows and the supply and demand of foreign exchange have been basically balanced, and the RMB exchange rate has picked up steadily. Encouraged by these, residents and enterprises have become more sensible in purchasing foreign exchange.
Looking ahead, the economy's momentum for making growth while maintaining stability will be further consolidated since China's economy boasts strong potential, remarkable resilience, and much leeway to improve, and new drivers of growth are being formed at a faster pace. As the opening up of China's financial market continues to deliver results, the foundation for the stable and even cross-border capital flows will be solidified, so as to boost the stability of foreign exchange reserves.
