Surprise gain in Chinese currency reserves despite the fall of the yuan

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Foreign exchange regulators in the country said the slight growth was due to volatility in exchange rates and asset prices. The yuan weakened against the US dollar last month due to tensions with the United States, but imports fell more sharply than expected.

China’s largest foreign exchange reserves rose in May to $ 3.102 billion, according to data from the State Exchange Administration.This is $ 10.2 billion, or 0.3%, more than the country’s central bank in late April.

Agency spokesman Wang Chunying said central bank gold reserves stood at 62.64 million troy ounces, unchanged from the end of 2019.

Chunying explained the increase in foreign exchange reserves, which was expected to collapse slightly, as a result of fluctuations in exchange rates and the prices of assets held by the central bank. He did not go into details.

He added that China will not change its financial policy instruments and “will continue to support the overall stability of foreign exchange reserves”.

The yuan fell 1% against the dollar last month, but foreign investment in Chinese stocks and bonds also rose in hopes of an economic rebound. China was the first major economy to start reopening, which should return it to normal sooner than others.

Customs data showed that Chinese exports held up slightly better than expected, but imports registered their worst decline in four years due to weak domestic demand and falling commodity prices.



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