China’s foreign exchange reserves exceed $3.1 trillion in May, highest in nine months
China’s
foreign exchange reserves jumped $6.1 billion from the end of April to $3.1
trillion at the end of May, the highest figure in nine months, according to the
State Administration of Foreign Exchange (SAFE) on Monday, June 10.
Wang
Chunying, spokesperson of the SAFE, noted that steady economic growth in China
will stabilize the foreign exchange market despite future uncertainties and
turbulence in the global financial markets.
Wang
said on June 10 that market sentiment is shifting toward risk aversion in
response to global trade and political uncertainties, including escalating
global trade disputes and Brexit, as shown by the rising US Dollar Index and
global bond index. The combination of fluctuations in the exchange rate and
asset prices contributed to the increase in foreign exchange reserves.
Liu
Jian, a senior research fellow at the financial research center of the Bank of
Communications, said that the key reason for the rise was the valuation factor.
In May, both the euro and the pound depreciated, while the yen appreciated,
causing a loss of about $5 billion in the foreign exchange reserves. However,
government interest rates in the US, Japan, the UK and the Eurozone all
declined. In May, the main US Treasury interest rate fell from 2.5 percent to
2.1 percent, leading to a significant increase in the foreign reserves, Liu
said.
Liu also
said that foreign institutions will continue to increase holdings of
yuan-denominated bonds, but the overall flow of foreign reserves will remain
stable.
Source:Global Times
On May 23, 2019, women workers in
Shimen Street Town, Boyang County, Jiangxi Province were happy to produce
clothing for export to Europe. (Photo by Zhuo Zhongwei from People’s Daily
Online)
China’s foreign exchange reserves exceed $3.1 trillion in May, highest in nine months
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