On December 7, the State Administration of Foreign Exchange announced the latest data on the scale of foreign exchange reserves. Data show that as of the end of November 2021, my country’s foreign exchange reserves amounted to US$3222.4 billion, an increase of US$4.8 billion or 0.15% from the end of October.
“In November, foreign exchange market transactions remained active, and cross-border capital flows were generally stable.” Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, said that the international financial market is affected by factors such as the progress of the new crown pneumonia epidemic and the monetary policy expectations of major countries. , The U.S. dollar index rose, and the bond prices of major countries rose overall. Foreign exchange reserves are denominated in U.S. dollars. Under the combined effect of exchange rate conversion and asset price changes, the scale of foreign exchange reserves increased during the month.
Wen Bin, chief researcher of Minsheng Bank, said in an interview with a reporter from the Securities Daily that in November, the scale of foreign exchange reserves rebounded for the second consecutive month, and it was also the seventh month that it remained above US$3.2 trillion. This is mainly caused by valuation factors, which are also supported by trade and capital flow factors.
Wen Bin analyzed that in terms of exchange rate changes, the U.S. dollar exchange rate index strengthened, rising 2% to 96.0 in November. The trend of non-dollar currencies against the US dollar diverged. The British pound fell 2.8%, the euro fell 1.9%, and the yen rose 0.7%. In terms of asset prices, the prices of financial assets in major countries were mixed. The hedged global bond index priced in US dollars rose 0.7%; the Eurozone Stoxx 50 index fell 4.4%, the Nikkei 225 index fell 3.7%, and the S&P 500 index Fell 0.8%. Foreign exchange reserves are denominated in U.S. dollars. Taking into account the effects of exchange rate translation and asset price changes, my country’s foreign exchange reserves rebounded slightly.
“Real trade and cross-border capital flows have contributed to the stability of foreign exchange reserves.” Wen Bin said that due to the global economic recovery and strong consumer demand around Christmas, my country’s new export orders PMI index rebounded by 1.9% month-on-month in November. , Exports maintained rapid growth. The dollar-denominated export value increased by 22% year-on-year, and the trade balance reached 71.71 billion US dollars, the second highest in the year. Northbound funds continued to maintain a net inflow, with a net inflow of 18.49 billion yuan in November. This supports the stability of my country’s foreign exchange reserves.
Wang Chunying emphasized that the current new crown pneumonia epidemic is still fluctuating around the world, the world economic recovery is facing more uncertain and unstable factors, and the international financial market is volatile. However, my country has scientifically coordinated epidemic prevention and control and economic and social development, and economic operations have generally recovered steadily and continuously, which is conducive to maintaining overall stability in the scale of foreign exchange reserves.
Wen Bin believes that the scale of my country’s foreign exchange reserves will continue to remain stable in the next stage. The overall recovery of my country’s economy has been maintained. Macroeconomic policies have increased cross-cycle adjustments to promote economic operation within a reasonable range, laying a foundation for maintaining a stable scale of foreign exchange reserves. At the same time, the recovery of the global economy is expected to support trade, domestic securities investment has good prospects, and funds are expected to maintain an inflow trend, which will help promote the balance of international payments and foreign exchange supply and demand. (Liu Qi)