Q: According to the latest data on foreign exchange reserves released by the People’s Bank of China, as of the end of October, China’s foreign exchange reserves decreased by USD33.9 billion from the end of September. Could you tell us why the change occurred? What’s the trend of foreign exchange reserves in the future?
A: By the end of October 2018, China’s foreign exchange reserves stood at USD3,053.1 billion, down by USD33.9 billion or 1.1% from the end of September.
In October, China’s cross-border capital flows were generally stable and the balance of payments basically maintained equilibrium. Affected by monetary policies of major countries, global trade situations, geopolitical situations, among others, fluctuations on the international financial market have intensified. The US dollar index has risen by over 2 percent, and asset prices in major countries witnessed adjustment. Due to the combined impact of exchange rate translation and asset price changes etc, the foreign exchange reserves declined slightly.
Since the beginning of this year, the international environment has been complex, with apparent rising of uncertainty in the global economic and financial market. China’s economy has maintained overall stability and steady progress, continued to remain within the reasonable range, and the foreign exchangemarket has been running smoothly. According to preliminary statistics, banks showed a small deficit of about USD3 billion in foreign exchange settlement and sales in October, narrowing by over 80% from September. Specifically, net purchase of foreign exchange by individuals was stable with a slight decline, both on a year-on-year basis and month-on-month basis.
Looking ahead, although there are many uncertain external factors, China's economic fundamentals are still robust, with strong resilience and adaptability. Meanwhile, with China’s economic transformation and upgrade as well as further opening-up, there are still adequate conditions which are conductive to steady operation of cross-border capital flow, and China’s foreign exchange reserves are expected to stay stable amid fluctuations.
