China’s forex reserves fall in April

BEIJING — China’s foreign exchange reserves fell in April as prices of global financial assets declined significantly amid a strengthening US dollar, official data showed on Saturday.

China’s forex holdings amounted to $3.1197 trillion at the end of April, down $68.3 billion, or 2.14 percent, from the end of March, data from the State Administration of Foreign Exchange showed.

“China continued to see cross-border capital net inflows in April, and the supply and demand of domestic foreign exchange market maintained balanced,” said Wang Chunying, the administration’s deputy head, commenting on the data.

Wang attributed the decline in forex reserves to the combined impact of the surge in the dollar index and the sharp decline in financial asset prices globally, due to factors including COVID-19, geopolitical situations, and monetary policy expectations in major economies.

Noting the rising external uncertainties and increasing fluctuations in the global financial market, Wang said China’s strong economic resilience and potential as well as its continued efforts on coordinating COVID-19 prevention and control with economic and social development will not change, which will help to stabilize the country’s forex reserves.

Echoing Wang’s views, Wen Bin, chief analyst at China Minsheng Bank, said he expects the country’s forex reserves to maintain stability in the next stage.

Wen highlighted the importance of the country’s increasing policy support to stabilize growth recently, noting that these pro-growth measures are conducive to stabilizing market expectations and boosting market confidence.