China's Foreign Reserves Hit $3.154 Trillion

Fri 07 Aug 2020 | 10:36 PM

Taarek Refaat

The People's Bank of China data on Friday showed that foreign exchange reserves in China - the largest in the world - rose $42.06 billion in July to $ 3.154 trillion.

China's foreign exchange reserves rose more than expected in July as the dollar weakened and the yuan consolidated as the world's second largest economy showed further signs of recovery.

Foreign flows into Chinese stocks and bonds have risen recently as investors bet on an economic recovery, and analysts had expected the country's reserves to rise by $12.67 billion to $3.125 trillion, likely due to fluctuations in global exchange rates and the prices of foreign bonds held by China.

Tight capital controls also helped China to keep outflows under control over the past year despite the shock from the pandemic closures, the trade war with the United States, and weak economic growth.

The Yuan rose 1.3% against the struggling dollar in July, while the green back fell about 4% in July against a basket of other major currencies.

Meantime, China held 62.64 million ounces of gold at the end of July, unchanged from the end of June and the value of gold reserves rose to $123.09 billion at the end of July from $110.76 billion at the end of June.

Foreign exchange reserves assets can include banknotes, deposits, bonds, treasury bills, and other government securities of the reserve currency, while some countries hold a portion of their gold reserves, and SDRs.