Our reporter Liu Qi
On April 7, the State Administration of Foreign Exchange released data on the size of foreign exchange reserves at the end of March 2024. Data show that as of the end of March 2024, my country’s foreign exchange reserves were US$3.2457 billion, an increase of US$19.8 billion from the end of February, an increase of 0.62%.
As for the reasons for the change in the size of foreign exchange reserves, the State Administration of Foreign Exchange stated that in March 2024, affected by factors such as the monetary policies and expectations of major economies, macroeconomic data, the U.S. dollar index rose, and global financial asset prices generally rose. The scale of foreign exchange reserves increased that month due to the combined effects of factors such as exchange rate conversion and changes in asset prices.
Guan Tao, global chief economist of BOC Securities, analyzed in an interview with a reporter from Securities Daily that in the first quarter of this year, on the one hand, affected by the revaluation of the Fed’s tightening expectations, the U.S. dollar index rose 3.1% to 104.5, and the 2-year and 10-year U.S. dollar index rose 3.1% to 104.5. Bond yields rose by 35 basis points and 32 basis points respectively; on the other hand, risk asset prices continued to rise, such as the S&P 500 Index rising by 10.2%. The positive valuation effect brought about by the larger increase in stock prices exceeds the negative valuation effect caused by the appreciation of the US dollar and the decline in bond prices. The scale of my country’s foreign exchange reserves remains basically stable.
At the same time, Guan Tao said that judging from the data on bank foreign exchange settlement and sales and foreign-related receipts and payments on behalf of customers, in the first quarter of this year, the RMB exchange rate continued to consolidate at a low level, but domestic market entities generally settled foreign exchange at a high level, and domestic foreign exchange supply and demand were basically balanced, and foreign stocks and bonds Net investment inflows resumed, and cross-border capital flows improved marginally. This is mainly due to the improvement of domestic private currency mismatch, the normalization of two-way fluctuations in the RMB exchange rate, and the fact that domestic market entities are increasingly using foreign exchange derivatives and local currency pricing and settlement to hedge and avoid exchange rate risks, making foreign exchange market entities more rational.
The State Administration of Foreign Exchange emphasized that my country’s economic recovery has continued to consolidate and strengthen, and its long-term positive fundamentals will not change, which will provide support for the basic stability of the scale of foreign exchange reserves.
Gold reserve data released on the same day showed that as of the end of March, my country’s central bank had 72.74 million ounces of gold reserves, an increase of 160,000 ounces from the previous month. my country’s central bank has started this round of gold reserve increases since November 2022, and by March 2024, it has achieved 17 consecutive months of increases.
In this regard, Wang Qing, chief macro analyst of Oriental Jincheng, believes that this means that despite the recent rapid rise in international gold prices, the central bank’s pace of increasing holdings has remained basically stable, mainly driven by the need to optimize the official reserve structure. Against the backdrop of increased volatility in U.S. bond yields, my country’s central bank continues to increase its holdings of gold, which helps maintain and increase the value of reserve assets. In addition, this can also lay a solid foundation for the continued advancement of the internationalization of the RMB.
(Editor: Wen Jing)
2024-04-08 02:48:49
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