China’s foreign exchange reserves, the largest in the world has expanded to USD 3.1123 trillion last month, official data showed on Tuesday. The amount increased by USD 10.6 billion, or 0.3 per cent, from the end of May, according to China’s State Administration of Foreign Exchange (SAFE).
China’s forex market in June reported generally balanced supply and demand, said SAFE spokesperson Wang Chunying. As world’s largest exporter, China has accumulated a sizable amount of forex reserves over the years. But the pace of their growth slowed in recent years due to fall of global exports markets and focus to expand domestic consumption amid slowdown of the second largest economy. Wang said the uptick in the scale of forex reserves is affected by multiple factors, including exchange rates and changes in asset prices.
Factors including the global spread of COVID-19 as well as monetary and fiscal stimulus of major economies led to the drop in the US dollar index and the rise in asset prices of major countries, Wang said state run Xinhua news agency reported. Wen Bin, chief analyst at China Minsheng Bank, said cross-border capital inflows also contributed to the rise in scale, adding that renminbi assets are attracting more global investors.
Despite a complex external economic environment amid the COVID-19 pandemic, Wang said China’s economy, with multiple indicators marginally improved, is shifting towards a good momentum. China has so far reported a total of 83,565 coronavirus cases and 4,634 deaths due to the disease..