China will enter the Lunar New Year with extended foreign exchange reserves. An increase in reserves came amid the weakening of the US dollar against other major currencies and a seasonal inflow of capital into the country.
China’s forex holdings, the world’s largest reserves, amounted to $3.250 trillion in December, up by $28 billion from a month earlier. At the end of November, they totaled $3.222 trillion, according to the data provided by the State Administration of Foreign Exchange (SAFE). China’s forex pile hit its highest level in six years, The Global Times, a Chinese newspaper, reported. Experts at The Wall Street Journal had expected the country’s foreign reserves to fall by $2 billion. The SAFE attributed the December rise to a seasonal inflow of capital into the country that offset the effect of the weaker US dollar.
The US dollar index fell, whereas the financial asset prices of major countries were mixed, SAFE deputy head Wang Chunying said, commenting on the data.
China's gold reserves expanded to $113.1 billion in December, rising from $113.03 billion a month earlier, the People's Bank of China reported. At the same time, the country’s gold reserves volume remained at 62.64 million troy ounces.