Xinhua Silk Road - Belt and Road Portal, China's silk road economic belt and 21st Century Maritime Silk Road Website Xinhua Silk Road - Belt and Road Portal, China's silk road economic belt and 21st Century Maritime Silk Road Website
Subscribe CustomBlackClose

Belt & Road Weekly Subscription Form

download_pop

Research ReportCustomBlackClose

The full edition of the report is available at Xinhua Silk Road Database. You can click the “Table of Content” to have a general understanding of it.

Click on the button below to create your account and get immediate access to thousands of articles.

Start a Free Trial

Xinhua Silk Road Database
Economy

China says forex reserves still abundant

January 20, 2017


Abstract : China still has ample foreign exchange (forex) reserves despite continued drops, and fluctuations in the reserves are normal, the State Administration of Foreign Exchange (SAFE) said Thursday.

BEIJING, Jan. 19 (Xinhua) -- China still has ample foreign exchange (forex) reserves despite continued drops, and fluctuations in the reserves are normal, the State Administration of Foreign Exchange (SAFE) said Thursday.

The forex reserves are strong enough to cover China's import bills and external debts and are able to safeguard the country's economic and financial security, said SAFE spokesperson Wang Chunying.

China's forex reserves fell for the sixth straight month to about 3.01 trillion U.S. dollars last month, 41.08 billion U.S. dollars lower from the November level, according to the central bank. For the whole year of 2016, forex reserves decreased 319.84 billion U.S. dollars.

The continued drop has stoked market concerns as the forex reserves have approached the 3-trillion-U.S. dollar psychological mark, a level that the country has stayed above for nearly six years.

But Wang said there is no need to "create excessive hype over a certain number."

"It is normal to see upward or downward fluctuations in any financial indicator," she said.

Wang explained that although there is no unified standard for forex reserve levels, traditionally, a country's forex reserves should cover at least three months of imports and all of its short-term foreign debts.

For China, paying for three months of imports requires about 400 billion U.S. dollars, if all paid in foreign currencies. Meanwhile, short-term external debts currently stand between 800 and 900 billion U.S. dollars, according to Wang.

Forex reserves dropped in December as the central bank used them to balance the forex market and non-greenback currencies weakened against the U.S. dollar, SAFE said in a previous statement.

Wang also mentioned that the domestic private sector's growing appetite for foreign assets is part of the reason for the slipping reserves.

Despite recent drops, China is still home to the world's largest forex reserves and enjoys forex inflows from its trade surplus and foreign direct investment.

Wang said China's forex reserves are expected to fluctuate within a reasonable range in the future, given the uncertain trend in the U.S. dollar and China's medium-high level of economic growth.

Scan the QR code and push it to your mobile phone

Keyword: China foreign-exchange reserves

Write to Us belt & road login close

Do you want to be a contributor to Xinhua Silk Road and tell us your Belt & Road story? Send your articles to [email protected] and share your stories with more people.

Click on the button below to create your account and get im http://img.silkroad.news.cn/templates/silkroad/en2017te access to thousands of articles.

Start a Free Trial

Ask Us A Question belt & road login close

If you have any questions, please enter them in the box below.

Identifying code Reload

Write to Us belt & road login close

Do you want to be a contributor to Xinhua Silk Road and tell us your Belt & Road story? Send your articles to silkroadweekly@xinhua.org and share your stories with more people.

Click on the button below to create your account and get im http://img.silkroad.news.cn/templates/silkroad/en2017te access to thousands of articles.

Start a Free Trial