China’s foreign exchange reserves, which are the world’s largest, increased for the first time this year, state data shows. China’s reserves rose by $80.6 billion last month to reach $3.13 trillion in May. The growth came as the US dollar hit a 20-year high last month. Loading Something is loading.
China’s foreign exchange reserves — the world’s largest — increased 0.26% in May from the prior month, marking the first increase this year.
The reserves rose by $80.6 billion to reach $3.13 trillion last month, the State Administration of Foreign Exchange (SAFE) reported Tuesday.
“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.
The growth, according to SAFE, stemmed mainly from exchanging other major currencies for the US dollar, which hit a 20-year high in May, as well as fluctuations in global asset prices.
“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,” SAFE added.
Last week, a Chinese official said the yuan won’t face as much volatility as earlier this year and can even strengthen against the dollar moving forward, as the US Federal Reserve struggles to balance growth and inflation.
“Yuan exchange rates are basically stable with two-way fluctuations,” Pan Gongsheng said Thursday, according to the South China Morning Post. “Many market institutions believe it will become more difficult for the Fed to stabilize growth while controlling inflation.”
Deal icon An icon in the shape of a lightning bolt. Keep reading
More: MI Exclusive Markets Yuan Dollar Chevron icon It indicates an expandable section or menu, or sometimes previous / next navigation options.