Amid the USD slipping against several major currencies during the COVID-19 pandemic, the forex reserves of China increased in October 2021 with respect to a monthly basis and this was witnessed after two preceding months.
It reached $3.218 trillion, which was an increase of 0.53 percent from September 2021. The forecast was $3.197 trillion. The reserves in October 2020 were $3.128 trillion. However, the August 2021 reserves were $3.232 trillion. A fall of 0.1 percent was witnessed in the dollar index in October 2021.
SAFE stated that the economy of China has continued to recover despite the invasion of the COVID-19 pandemic waves during the period. It showed great potential and resilience. This was a great support in scaling forex reserves.
The reserves further rose to $3.222 trillion in November 2021. It was an unexpected rise as the USD gained value against most major currencies. The rise was by $4.77 billion. It is the largest forex reserve in the world.
The Chinese currency yuan rose by 0.6 percent in the same month against the USD, which jumped 1.9 percent against several major currencies.
The forex holdings in February 2022 were $3.21 trillion, a drop from the previous month as the USD further gained strength against major currencies and financial asset prices declined globally. The drop was 0.24 percent or $7.8 billion from January.
SAFE deputy head stated cross-border flow of capital was orderly and stable in January 2021 and simultaneously a balanced domestic forex supply and demand was witnessed. The drop was due to a rise in the dollar index as well as the changes in the prices of financial assets globally, driven by various factors like geopolitical situations.
Simultaneously, the reserves for gold were 62.64 million ounces in October 2021. The reserves in September too were the same.
What is Forex Reserves
It refers to the deposits of foreign currencies and held by the monetary authorities and central banks of countries. It is not limited to just foreign currencies. IMF fund, SDRs and gold reserves too are included. China has the largest forex reserves in the world followed by Japan, Switzerland, Russia, India, Taiwan, Hong Kong, South Korea, Saudi Arabia and Singapore. The countries having the poorest forex reserves in the world include Kiribati, Somalia, Burkina Faso, Equatorial Guinea, Montserrat, Benin, South Sudan, Burundi, Chad, Zimbabwe, Senegal, Dominica, Sudan and Samoa.
Data of December 2021 reveals Brazil is placed in the 11th position, Germany in the 12th and the United States in the 13th place. TheÂ United Kingdom is ranked next to France in the 16th position and it is followed by Italy.