Chart of the Day: China’s Forex Hoard Hits 18-Month Low on Strong Dollar
China’s foreign exchange reserves fell to an 18-month low of $3.053 trillion in October, according to the State Administration of Foreign Exchange (SAFE).
Graphic: Gao Baiyu/Caixin
Reserves fell by $33.93 billion from September, the biggest monthly drop since December 2016, according to SAFE data.
“The combination of exchange rate conversion and asset price changes has led to a slight decline in the size of foreign exchange reserves,” said SAFE spokesperson Wang Chunying at a media briefing (link in Chinese) yesterday.
Wang said a stronger U.S. dollar is behind the reserves’ asset price changes. China has the world’s largest foreign exchange reserves and it holds assets in multiple currencies, many of which have weakened against the strong U.S. dollar.
The Chinese currency has tumbled this year amid trade frictions with the U.S. and the weakening prospects of China’s economy. The yuan has weakened about 1.3% against the U.S. dollar in October, Caixin calculations show.
Contact reporter Charlotte Yang (firstname.lastname@example.org)
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