The scale of foreign exchange reserves has “three consecutive rises” to a record high in 6 years
People’s Daily Online, Beijing, January 8th. The State Administration of Foreign Exchange released data on the 7th. As of the end of December 2021, my country’s foreign exchange reserves stood at US$3,250.2 billion, an increase of US$27.8 billion or 0.86% from the end of November, achieving three consecutive times. Steady month-on-month growth. Compared with the end of December 2020, the scale of my country’s foreign exchange reserves in 2021 will increase slightly by 33.7 billion U.S. dollars, an increase of 1%, and set a new high since 2016.
Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, said that in December 2021, the foreign exchange market will generally operate smoothly and cross-border capital flows will be active and orderly. In the international financial market, affected by factors such as the progress of the new crown pneumonia epidemic and the monetary policy expectations of major countries, the US dollar index has fallen, and the prices of major countries’ financial assets have fluctuated.
“Foreign exchange reserves are denominated in U.S. dollars, and the amount of non- U.S. currencies converted into U.S. dollars increases. Together with asset price changes and other factors, the scale of foreign exchange reserves increased during the month,” said Wang Chunying.
Wen Bin, chief researcher of Minsheng Bank, said that valuation factors are the main reason for the rebound in foreign exchange reserves. In terms of exchange rate changes, the U.S. dollar exchange rate index fell, and non-U.S. currencies were mixed with the U.S. dollar. In terms of asset prices, the stock indexes of major countries rose as a whole. Foreign exchange reserves are denominated in U.S. dollars. Taking into account the effects of exchange rate translation and asset price changes, the scale of my country’s foreign exchange reserves has rebounded. At the same time, real trade and cross-border capital flows have contributed to the steady rise of foreign exchange reserves. In terms of securities investment, the cumulative net inflow of northbound funds in December was 89 billion yuan, a new high for monthly net inflows in 2021, which also supported the steady increase in the scale of my country’s foreign exchange reserves.
Industry insiders believe that in 2021, under the background of the global spread of the new crown pneumonia epidemic and continuous recurrence, it is not easy for my country’s foreign exchange reserves to remain stable as a whole, indicating that my country’s foreign exchange reserve management level has been steadily improving.
Talking regarding the future development trend of the scale of foreign exchange reserves, Wang Chunying said that the current global new crown pneumonia epidemic and the world economic situation are complex and severe, and the international financial market is still facing many unstable and uncertain factors. However, my country has coordinated efforts to promote epidemic prevention and control and economic and social development, and the fundamentals of strong economic resilience and long-term improvement have not changed, which is conducive to maintaining the overall stability of the scale of foreign exchange reserves.
Wen Bin believes that in the next stage, the foundation for my country’s long-term economic improvement will remain unchanged. A series of policies to stabilize growth will be introduced and implemented with forward efforts to keep the economy operating within a reasonable range and lay the foundation for maintaining a stable scale of foreign exchange reserves. . At the same time, my country continues to open up to the outside world, international investors are optimistic regarding China’s development prospects, and related securities investments are expected to remain stable, which will help promote the balance of international payments and foreign exchange supply and demand.