China’s forex reserves climb for the first time in 2022, but yuan depreciation pressure remains
- China’s foreign exchange reserves – the world’s largest – rose to US$3.13 trillion last month from US$3.12 trillion in April
- Growth reflects the valuation effect from exchanging yuan into US dollars and changes in global asset prices, regulators say
China’s foreign exchange reserves grew by US$8.06 billion in May, the first increase this year, according to official data, amid growing pressure on the world’s second largest economy that could further weaken the yuan.
The country’s foreign exchange reserves – the world’s largest – rose to US$3.13 trillion last month from US$3.12 trillion in April, according to data from the State Administration of Foreign Exchange (SAFE) released on Tuesday.
The exchange regulator said in a statement the 0.26 per cent growth last month from April mainly reflected the valuation effect from exchanging other major currencies into US dollars – in which its reserves fund is denominated – and changes in global asset prices.
“The current external environment is still complex and severe, the global economy is facing increasing risks and challenges, and the international financial market is still subject to great uncertainty,” said SAFE.
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“However, China has effectively coordinated pandemic prevention and control with economic and social development, and the long-term economic fundamentals have not changed, which will support the overall stability of the scale of foreign exchange reserves.”