China's Forex Reserves Rise to $3.088 Trillion

[beijingwalker]

China’s Forex Reserves Rise for Third Consecutive Month
By Charlotte Yang / Feb 12, 2019 03:51 PM / Finance

China’s foreign exchange reserves grew for the third consecutive month in January, up 0.5% from December to $3.088 trillion, official data showed Monday. The January climb of $15.2 billion was a greater increase than December’s $11 billion and November’s $8.6 billion, according to data from the People’s Bank of China (PBOC).

Higher financial asset prices and movements in exchange rates were the main drivers of January’s pick-up, said Wang Chunying, spokesperson of the State Administration of Foreign Exchange. Wang said the Chinese foreign exchange market maintained a basic equilibrium and cross-border capital flows were stable in January.

The yuan, also known as the renminbi, has been facing less downward pressure as trade tensions between China and the U.S. ease and U.S. bond yields fall, according toa research note published by Capital Economics on Monday.

“The PBOC appears to have intervened little in forex markets last month, suggesting that the renminbi is not facing much downward pressure at present. However, with the economy likely to slow and interest rates likely to fall further over coming months, pressure is likely to return later this year,” said Capital Economics

https://www.caixinglobal.com/2019-02-12/chinas-forex-reserves-rise-to-3088-trillion-101378737.html

 

[Skull and Bones]

That is a massive amount, congrats. Maybe China should diversify from holding just US bonds.

 

[SBUS-CXK]

That is a massive amount, congrats. Maybe China should diversify from holding just US bonds.

What time do you go to Shanghai Disneyland？

 

[beijingwalker]

That is a massive amount, congrats. Maybe China should diversify from holding just US bonds.

Already did, China used to hold 3.4 trillion and the government started the diversification policy a couple of years ago, but still has trouble investing this huge amount of money which is still coming in bulk by the hour.

 

[Skull and Bones]

Already did, China used to hold 3.4 trillion and the government started the diversification policy a couple of years ago, but still has trouble investing this huge amount of money which is still coming in bulk by the hour.

I guess gold is a safe heaven in coming years, my family already started offloading mutual funds and is buying gold.

 

[Offshore]

That is a massive amount, congrats. Maybe China should diversify from holding just US bonds.

OBOR project.. ring a bell?

 

[Mista]

Already did, China used to hold 3.4 trillion and the government started the diversification policy a couple of years ago, but still has trouble investing this huge amount of money which is still coming in bulk by the hour.

Nah. There are massive capital outflow out of China over the past few years and China had to tighten capital controls and spend their foreign reserves to defend the currency.

https://www.ft.com/content/43f2c4e6-e260-11e8-a6e5-792428919cee

Nov 2018:

China spent roughly $32bn in foreign exchange reserves to strengthen the renminbi in October, its heaviest monthly intervention in nearly two years in the latest sign of Beijing’s nervousness about the economy.

Iris Pang, Greater China economist at ING in Singapore, said the monthly drop in October was small compared with late 2015, when monthly declines averaged $70bn over a six-month period.

China’s forex reserves peaked at just under $4tn in mid-2014, but in the following two-and-a-half years the PBoC burnt through nearly $1tn to prop up the renminbi amid a capital outflow surge.

Such intervention declined significantly from early 2017 through the middle of this year, after tighter capital controls and a strong economy eased pressure on the renminbi. But downward pressure has resumed in recent months, as a rising US dollar— fuelled by Federal Reserve interest-rate hikes — coincided with a weakening Chinese economy and concerns that US tariffs would shrink China’s trade surplus.

China posted a current account deficit of $13bn through the first nine months of this year, putting the country on pace for its first full-year deficit since 1993, according to balance of payments data.

 

[beijingwalker]

Nah. There are massive capital outflow out of China over the past few years and China had to tighten capital controls and spend their foreign reserves to defend the currency.

https://www.ft.com/content/43f2c4e6-e260-11e8-a6e5-792428919cee

Nov 2018:

Western report, China did have new policy of diversify reserves, if you always listen to the western Chinese economy reports or analysiis , China's economy should've crashed at least 2 decades ago.

 

[Mista]

Western report, China did have new policy of diversify reserves, if you always listen to the western Chinese economy reports or analysiis , China's economy should've crashed at least 2 decades ago.

Western analysis? These are figures reported by the official Chinese data. Do you need me to find Chinese sources for you?

 

[beijingwalker]

Western analysis? These are figures reported by the official Chinese data. Do you need me to find Chinese sources for you?

China also reported policy of diversify reserves for investment a couple of years ago. But it's pointless arguing that, it's all part of the government plan to have more or decrease the reserve.

 

[OIO]

That is a massive amount, congrats. Maybe China should diversify from holding just US bonds.

what about BRI?

 

[Mista]

China also reported policy of diversify reserves for investment a couple of years ago.

Do you have some figures?

I have some figures here, and it seemed like most of China's foreign assets are still in the forex reserves.

 

[beijingwalker]

Do you have some figures?

I have some figures here, and it seemed like most of China's foreign assets are still in the forex reserves.

That's one of the things China has been doing.
https://www.rt.com/business/451259-china-expands-gold-reserves/

 

[Mista]

That's one of the things China has been doing.
https://www.rt.com/business/451259-china-expands-gold-reserves/

That's roughly only 2-3% of China total forex reserves.

https://en.wikipedia.org/wiki/Gold_reserve#Officially_reported_holdings

 

[beijingwalker]

That's roughly only 2-3% of China total forex reserves.

https://en.wikipedia.org/wiki/Gold_reserve#Officially_reported_holdings

That's why I said one of ..., it's the government new strategy, can google for details if you are interested.