June: China's foreign reserves dip on strong dollar, weaker asset prices

China's foreign exchange reserves declined as the U.S. dollar index rose and the prices of global assets drop, Wang Chunying, deputy head of the State Administration of Foreign Exchange (SAFE), said on Thursday.

SAFE's data showed China's foreign exchange reserves dipped to $3.07 trillion at the end of June, down by $56.5 billion, or 1.81 percent, from the end of May.

In June, China's foreign exchange market ran smoothly, continuing the balanced supply and demand of foreign exchange, Wang said. 

Meanwhile, in the international finance market, the U.S. dollar index ascended while prices of financial assets in major economies meltdown, affected by the monetary policies of major countries, inflation expectations and global economic growth prospects, she said.

As foreign exchange reserves are denominated in U.S. dollars, when converting the non-U.S. dollar currencies into U.S. dollars, the number of foreign reserves decreases to the above factors, Wang explained.

The external environment is becoming more complex and severe, Wang said, adding that global economic growth has slowed down, inflation remains high, and the volatility of the international financial market has increased.

The overall stability of China's foreign exchange reserves will be supported by China's economic resilience and good economic fundamentals as the country coordinates pandemic prevention with economic and social development, she said. 

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