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 October 2020? What would you say about the future trends?
A: By the end of October 2020, China's foreign exchange reserves recorded US$3.128 trillion, down by US$14.6 billion or 0.46% month on month.
In October, China’s foreign exchange market performed stably, and market transactions were rational and orderly. On the international financial markets, affected by COVID-19 as well as monetary and fiscal policy expectations, the US dollar index increased, while the asset prices of major countries fell. Under the combined impact of exchange rate conversion and asset price changes, China's foreign exchange reserves decreased in October.
Currently, the global economic environment is complex, the instability and uncertainty has increased markedly, and the international financial markets have become more volatile. China shows good long-term economic prospects and strong development resilience. In the 14th Five-Year Plan period, China will accelerate building a new development pattern, featured as domination by domestic cycle and mutual promotion between domestic and international cycle, achieve sustained and sound economic development based on significant improvement of quality and benefits, and provide solid support for the overall stability of the foreign exchange reserves.