The scale of China's foreign exchange reserves has returned to above 3.2 trillion US dollars, and the gold reserves have increased continuously for 14 consecutive years-瞭望新时代网-瞭望时代，放眼世界

The scale of China's foreign exchange reserves has returned to above 3.2 trillion US dollars, and the gold reserves have increased continuously for 14 consecutive years

2024-01-08

The annual foreign exchange reserve scale increased by 110.3 billion US dollars, and the official increase in gold holdings was 7.23 million ounces (approximately 205 tons) - China's foreign exchange reserve performance report for the whole year of 2023 has been released. On January 7th, the State Administration of Foreign Exchange released data showing that as of the end of December 2023, China's foreign exchange reserves amounted to 3238 billion US dollars, an increase of 66.2 billion US dollars or 2.1% compared to the end of November. At the same time, the "gold fever" continues to sweep across central banks around the world. According to data, as of the end of December 2023, China's central bank's gold reserves were reported at 71.87 million ounces, an increase of 290000 ounces compared to the previous month. This is also the 14th consecutive month that China's central bank's gold reserves have increased. The scale of China's foreign exchange reserves has returned to above $3.2 trillion in December 2023. After achieving two consecutive increases, the scale of China's foreign exchange reserves has returned to above $3.2 trillion and reached its highest level in 2023. This is mainly driven by the positive valuation effect. Bank of China Securities Global Chief Economist Guan Tao told reporters that the significant rebound in China's foreign exchange reserves in the month was mainly due to the expected shift in the Federal Reserve's monetary policy and the "three rises" in global stock and bond exchange rates. The positive valuation effect caused by the revaluation of exchange rates and asset prices has driven up China's foreign exchange reserves. Looking back at December last year, the US dollar index fell and global financial asset prices overall rose. In terms of currency, the US dollar exchange rate index fell 2.1% to 101.3, and non US dollar denominated assets generally appreciated after being converted into US dollars. In terms of asset prices, the hedged global bond index priced in US dollars rose 3.2%; The S&P 500 stock index rose 4.4%. "The combined effect of exchange rate conversion and asset price changes has led to an increase in the scale of foreign exchange reserves," analyzed Wen Bin, Chief Economist of China Minsheng Bank. China's foreign exchange reserves are relatively abundant and have a solid foundation for recovery. Throughout 2023, against the backdrop of a slowdown in the Federal Reserve's tightening pace, a rise and fall in the US dollar index and bond yields, and an overall strengthening of the global stock market, China's foreign exchange reserve balance has remained stable at over 3.1 trillion US dollars, with an additional 110.3 billion US dollars added throughout the year. "China's foreign exchange reserves are relatively abundant, providing important guarantees to cope with the complexity, severity, and uncertainty of the external environment." Guan Tao analyzed that by the end of 2023, the balance of China's foreign exchange reserves will be equivalent to about 15 months of import payments, which is more than one month higher than the end of last year and far higher than the international warning standard of no less than 3 to 4 months. Looking ahead to the fluctuation trend of China's foreign exchange reserve scale, experts believe that the convergence of multiple positive factors will lay a solid foundation for the recovery of China's foreign exchange reserve scale. Wen Bin stated that as China's economy stabilizes and improves, the foreign trade market diversifies, the export structure continues to optimize, and the resilience of foreign trade continues to strengthen, the expectation of the Federal Reserve's interest rate cut has also led to a narrowing of the interest rate gap between China and the United States, and an increase in foreign investment inflows under capital accounts. These are all conducive to the overall stability of the international balance of payments situation, laying a solid foundation for the recovery of China's foreign exchange reserves. Guan Tao stated that the domestic economy continues to rebound and improve, and the inflection point of overseas currency tightening is approaching, which will help maintain the basic stability of China's foreign exchange reserve scale

Edit：Hou Wenzhe Responsible editor：WeiZe

Source：Shanghai Securities Daily

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