Original Title: At the end of October, my country’s foreign exchange reserves increased by US$17 billion in a ring, and remained above US$3.2 trillion for the sixth consecutive month
Our reporter Liu Qi
On November 7, the State Administration of Foreign Exchange announced the latest data on the scale of foreign exchange reserves. Statistics show that as of the end of October 2021, my country’s foreign exchange reserves amounted to US$32176 billion, an increase of US$17 billion or 0.53% from the end of September.
Wang Chunying, deputy director and spokesperson of the State Administration of Foreign Exchange, said that in October, the supply and demand of my country’s foreign exchange market remained stable, and cross-border revenue and expenditure transactions were rational and orderly. In the international financial market, affected by factors such as the progress of the new crown pneumonia epidemic, the fiscal policy and monetary policy expectations of major countries, the US dollar index fell slightly, and the prices of major countries’ financial assets were mixed. 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.
“The scale of my country’s foreign exchange reserves has remained above US$3.2 trillion for the sixth consecutive month.” Wen Bin, chief researcher of China Minsheng Bank, said in an interview with a reporter from the Securities Daily. On the one hand, it comprehensively considers exchange rate conversion and asset price changes. As a result, the scale of my country’s foreign exchange reserves has increased; on the other hand, my country’s recent exports have maintained rapid growth, and the northbound capital has maintained a net inflow. Trade and cross-border capital flows may contribute to the increase in the scale of foreign exchange reserves.
According to data released by the General Administration of Customs on November 7, my country’s exports in October were US$30.22 billion, a year-on-year increase of 27.1%; imports were US$215.68 billion, a year-on-year increase of 20.6%; the trade surplus was US$84.54 billion, a year-on-year increase of 47.5%. In addition, according to Wind statistics, the total turnover of Northbound funds in October was 1,636.98 billion yuan, and the net purchase was 32.841 billion yuan, which has been a net buying trend for 13 consecutive months.
Wang Chunying said that the current new crown pneumonia epidemic continues to repeat, the global economic recovery is facing many unstable factors, and the international financial market is volatile. However, my country’s economy continues to recover, with strong resilience and huge potential, which will provide support for maintaining overall stability in the scale of foreign exchange reserves.
“Under the background that the total sales in the United States continued to be higher than the total inventory in the United States year-on-year and the inventory-to-sales ratio in the United States continued to be at a low level. The Facility Construction Act predicts that my country’s trade surplus from November to December will continue to be at a high level, supporting my country’s foreign exchange reserves. However, under the background of the Federal Reserve’s announcement of the Taper, the U.S. macro economy is improving and the U.S. CPI and PPI are at a high level. The 10-year period is expected. The U.S. bond yield to maturity is likely to rise, and the U.S. dollar index is likely to continue to rise, which may be negative for my country’s foreign exchange reserves.” The scale of foreign exchange reserves will also exceed US$3.2 trillion.
Wen Bin believes that the scale of my country’s foreign exchange reserves will continue to remain stable in the next stage. my country’s economy continues to recover, the main economic indicators are within a reasonable range, the overall economic fundamentals are improving, and the scale of foreign exchange reserves has a stable foundation. In the context of strong external demand, my country’s exports are expected to maintain a good momentum. International investors are optimistic about the prospects of RMB assets, and securities investment maintain a net inflow trend, laying the foundation for maintaining a basic balance between foreign exchange supply and demand and international payments.
“At the same time, we must also see that there are still many unstable and uncertain factors in the global economic recovery. Inflation is heating up, the policy expectations of major economies have changed, the international financial market has increased volatility, the Fed has decided to start reducing the scale of bond purchases, and global liquidity The environment is facing the risk of gradual tightening. The epidemic in some areas of the country has also affected the process of economic recovery. The increase in energy prices has pushed up the PPI and affected the production and operation of some enterprises.” Wen Bin suggested that macroeconomic policies should continue to make cross-cyclical adjustments and increase Vigorously boost domestic demand and continue to increase structural support to help companies cope with the impact of rising production costs and prepare for the impact of internal and external risks.