A staff member counts the banknotes at a bank in Qionghai, southern China’s Hainan province. (Photo: Xinhua)
China’s foreign exchange reserves stood at $ 3.2 trillion at the end of December 2021, up $ 27.8 billion on a month-to-month basis and peaking in six years, according to data released by the Administration on Friday. ‘State of exchange.
The rising valuation of the Chinese currency continued to be the main factor behind the increase in China’s foreign exchange reserves in 2021, officials said.
Wang Chunying, a spokesperson for the foreign exchange administration, said that due to recent outbreaks of coronavirus and expectations of a change in monetary policy in some major countries, the US dollar index has fallen, this which caused an “increase in valuation” of currencies other than the US dollar. and contribute to the upward trend in China’s foreign exchange reserves.
Resulting from the stronger-than-expected production of the manufacturing sector thanks to the government’s effective pandemic prevention and control measures, China’s exports are on the rise, helping to support the robust growth of the country’s foreign exchange reserves, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Saturday.
While China’s December trade data is due for release on Friday, the market generally expects Chinese exports to continue on their upward trajectory.
China’s strong economic fundamentals and rising foreign exchange reserves are expected to support the value of the yuan in 2022, which has performed relatively well against various other currencies in 2021, particularly the US dollar.
Although an appreciating domestic currency will hamper Chinese exports, Xi said the exchange rate is only one of many factors that impact exports. The evolution of Chinese exports in 2022 will depend on the overall performance of the Chinese economy and the global economy in the post-pandemic era, he said.
“In any case, an abundant foreign exchange reserve will enhance the stability and security of the country’s financial system, in the event of sudden financial risks emerging in the foreign exchange market or the foreign debt market,” Mr. Xi.