China’s foreign exchange reserves rose to a maximum since March 2022

By Alexander Miller, consultant in emerging markets. Eurasia Business News – February 11, 2023

Photo : The central bank of the People’s Republic of China. Responsible for formulating and implementing monetary policies, supervising and regulating the financial industry.

In January 2023, China’s foreign exchange reserves, the world’s largest, rose to $3.184 trillion from $3.128 trillion in December, data from the Chinese State Bureau of Foreign Exchange (SAFE) showed.

The reserves increased for the fourth month in a row and are now at their highest since March 2022.

Analysts on average had forecast a rise in reserves last month to $3.152 trillion, according to Trading Economics.

The yuan exchange rate in January rose by 2.2% against the US national currency. Meanwhile, the dollar fell by 1.4% against a basket of major world currencies.

Gold reserves in China at the end of last month amounted to 65.12 million ounces, an increase from 64.64 million ounces in December. In value terms, they rose to $125.28 billion, compared with $117.24 billion. In the fourth quarter of 2022, the China’s central bank bought 62 tonnes of gold, the largest purchase amid central banks in the world, bringing the Chinese state reserves to 2,010 tonnes of the precious yellow metal.

Attributing the growth to a weaker US dollar and a rise in global financial markets, SAFE said in a statement that the Chinese economy has recovered with growing endogenous momentum, conducive to keeping the scale of foreign exchange reserves stable.

Read also : How to invest in gold

The IMF revised China’s growth outlook sharply higher for 2023, to 5.2% from 4.4% in the October forecast after “zero-COVID” lockdown policies in 2022 slashed China’s growth rate to 3.0% – a pace below the global average for the first time in more than 40 years.

China’s annual inflation rate rose to 2.1% in January 2023 from 1.8% in December, compared with market forecasts of 2.2%. 

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