Jul 09, 2018 (China Knowledge) - China's foreign exchange reserves bounced back in June after it fell for two consecutive months. The State Administration of Foreign Exchange (SAFE) announced on Monday that China's foreign exchange reserves at the end of June expanded USD 1.51 billion from a month earlier to USD 3.11 trillion, ending a two-month consecutive decline with a decrease of USD 14.23 billion in May.
The latest figure, which was more than the USD 3.10 trillion market estimates, came as a surprise after China's renminbi (RMB) recorded one of its worst performance last month amid heated trade dispute with the US. The exchange rate of RMB against the US dollar has depreciated by 3.3% in June 2018, the largest monthly decline since China embarked on a market-oriented exchange reform in 1994. It is expected that foreign reserves will be used to prop up the currency in order to stabilize the currency amid growing worries about trade friction.
A spokesperson from SAFE said that since the start of the year, China economy has maintained its steady and positive development trend, but the global economic recovery proceeded in an asymmetric fashion and trade frictions and shocks have escalated, with some emerging economies facing pressure from capital outflows and currency devaluation.
"Due to the combined effects of domestic and foreign factors, the size of China's foreign exchange reserves is expected to remain stable in the midst of volatility," he said.
He added that China will stick to supply-side structural reform, further deepen reform and opening up and strengthen innovation drive, even though uncertainties in the external environment have increased with rising trade protectionism rising, Fed's interest rate hikes and tightening global liquidity.
Copyright © 2018 www.chinaknowledge.com
Send feedback or comments to: firstname.lastname@example.org
For more news, financial weekly reports, business guides to China and other premium information, subscribe to China Knowledge today: www.chinaknowledge.com
To access our page on Bloomberg, type CKFI