BEIJING, China – China’s forex reserves significantly expand in October, according to official data released by the People’s Bank of China on Thursday.
The forex exchange of the country reached 3.1052 trillion US dollars by the end of October. The amount gained a significant increase of about 0.4% from what data showed at the end of September, earning about 12.7 billion dollars. This data is based on one given by the SAFE (State Administration of Foreign Exchange). The total value of the gold reserves of China is about 94.65 billion dollars at the end of October.
These official reserves figures significantly indicate that the PBoC has carried on abstaining from last month’s direct FX intervention, according to economists from Capital Economics, Martin Lynge Rasmussen, and Julian Evans Pritchard. They also added that the data points to a decrease in the capital outflows, which hopefully would help make it simpler for the PBoC to relieve the monetary conditions.
According to the same official data, the increase in China’s foreign exchange reserves was hugely caused by the effects of valuation. Also, according to the spokesperson for SAFE, Wang Chunying, the increase in forex reserves was affected by several factors such as the changes in the asset prices as well as exchange rates.
Wang also listed several of the factors that have significantly affected how low the US dollar index have become as well as the decrease in bond prices from several major countries, which includes monetary policies of several bigger countries, global trade situation, and the concerns and uncertainties regarding Brexit.
But despite the expanding external uncertainties in the market, China’s economy remains to be one of the promising leads. It has maintained overall stability, unlike other major countries at the moment. The Chinese economy has also posted an increasing and more stable economic growth, thanks to their improved and significantly better economic structure. It was also what Wang said in a statement, citing a balanced demand and supple when it comes to the forex market as well as the steady growth of the country’s forex exchange reserves.
Wang also continued by stating that the strong economic fundamentals of China and their continuous reform are major factors that will help the country in fighting against the challenges and risks as well as giving a solid foundation for China’s forex reserves to continue its stable growth.