Due to the combined effect of factors such as exchange rate translation and changes in asset prices, the scale of the mainland's foreign exchange reserves increased month-on-month in March, and gold reserves rose for the 17th consecutive month.
On April 7, the State Administration of Foreign Exchange released data showing that as of the end of March 2024, the scale of the mainland's foreign exchange reserves was US$3,245.657 billion, an increase of about US$19.8 billion, or 0.62%, from the end of February.
Moreover, this is the fourth consecutive month that the mainland's foreign exchange reserves have stood at the $3.2 trillion mark, and the foreign exchange reserves will stabilize at more than $3.1 trillion for the whole year in 2023.
At the same time, the mainland's gold reserves were 72.74 million ounces at the end of March and 72.58 million ounces at the end of February, marking the 17th consecutive month of increasing gold reserves, but this is also the smallest increase in gold reserves by the central bank in 17 months.
According to the State Administration of Foreign Exchange, in March 2024, affected by the monetary policies and expectations of major economies, macroeconomic data and other factors, the US dollar index rose, and global financial asset prices rose overall. Under the combined effect of factors such as exchange rate translation and changes in asset prices, the scale of foreign exchange reserves increased in the month. The mainland's economic upward trend has been consolidated and strengthened, and the fundamentals of the long-term positive economy will not change, which will provide support for the scale of foreign exchange reserves to remain basically stable.
Guo Jiayi, chief foreign exchange researcher of Industrial Research, told the media that the central bank's increase in gold holdings is due to the demand for asset and currency diversification on the one hand, and the high allocation value of gold in the current macro environment on the other hand. Gold has currency, bond and commodity attributes at the same time, and the value of gold allocation is highlighted in the context of the global macro Compo in a depression, the commodity capacity cycle entering the investment cycle and the U.S. debt cycle nearing the end. The new high of gold prices will affect the pace of increasing holdings, but it will not change the overall allocation direction.
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