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 changed in July 2020? What will be the future trends?
A: By the end of July 2020, China's foreign exchange reserves had reached US$ 3.1544 trillion, up by US$ 42.1 billion or 1.4% month on month.
In July, China’s foreign exchange market witnessed smooth operation and maintained basic equilibrium in foreign exchange supply and demand. Major economies including the US and Europe increased the fiscal stimulus and maintained ultra-loose monetary policies. Non-dollar currencies rallied against the US dollar on the international financial market on the whole, with overall rise of asset prices in major countries. Under the combined impact of exchange rate conversion and asset price changes, China's foreign exchange reserves increased in the month.
So far, China has made great achievements in epidemic prevention and control as well as economic and social development. However, international economic and financial situations remain complex and severe, showing considerable instability and uncertainty. Looking ahead, China has entered into the high-quality development stage with high economic resilience, and the new development pattern, featured as domination by domestic cycle and mutual promotion between domestic and international cycle, is expected to take shape with a faster pace. The new pattern is conducive to providing continued support for the overall stability of foreign exchange reserves.