According to data released by the State Administration of Foreign Exchange on July 7, as of the end of June 2022, my country's foreign exchange reserves were US$3,071.3 billion, down US$56.5 billion or 1.81% from the end of May.According to industry insiders, the main factors affecting the fluctuation of my country's foreign exchange reserves are still exchange rate factors and asset price changes.Looking ahead, my country's economic fundamentals remain sound, which is conducive to maintaining a balance of international payments and maintaining stable foreign exchange reserves.
Wang Chunying, deputy director of the State Administration of Foreign Exchange and spokesperson, said that in June 2022, my country's foreign exchange market will operate smoothly, and domestic foreign exchange supply and demand will continue to be basically balanced.In the international financial market, affected by major countries' monetary policies, inflation expectations, global economic growth prospects and other factors, the US dollar index rose significantly, and the prices of financial assets in major countries fell sharply.
Data show that in June, the US dollar exchange rate index rose 2.9% to 104.7, a new high in nearly 20 years; among non-US dollar currencies, the euro fell 2.3%, the pound fell 3.4%, and the yen fell 5.2%.In assets, the U.S. dollar-denominated index of hedged global bonds fell 1.5%; the S&P 500 stock index fell 8.4%, the euro zone Stoxx 50 fell 8.8% and the Nikkei 225 fell 3.3%."Foreign exchange reserves are denominated in US dollars, and the amount of non-dollar currencies converted into US dollars decreases, which is combined with changes in asset prices and other factors, and the scale of foreign exchange reserves in the month decreased." Wang Chunying said.
Wen Bin, chief economist of China Minsheng Bank, estimated that from the perspective of exchange rate factors, the US dollar index rose by 2.9% at the end of June compared with the end of May, which led to a loss of about US$30 billion in my country's non-US dollar-denominated foreign exchange reserves.From the perspective of asset price factors, the global bond and stock markets fell overall in June, especially equity assets fell sharply, and it is expected that the negative impact on the formation of my country's foreign exchange reserves may be greater than 10 billion US dollars.
Wen Bin also said that, excluding exchange rate and asset price factors, my country's foreign exchange reserves on the basis of balance of payments did not fluctuate greatly in June, which shows that my country's foreign exchange market is operating generally stable, domestic foreign exchange supply and demand remain basically balanced, and the current account of the balance of payments is maintained. , Capital and financial projects are still in a state of "one smooth and one inverse".
"Judging from the trend of the RMB exchange rate in June, both the actual volatility and the implied volatility of options have declined, which also reflects the more stable expectations of the foreign exchange market. With the improvement of the epidemic prevention and control situation and the progress of resumption of work and production, my country's economic fundamentals remain sound, which is conducive to maintaining a balance of international payments and a stable foreign exchange reserve." Wen Bin said.
Wang Chunying also said that the current global economic growth is slowing down, inflation remains high, the volatility of the international financial market has increased, and the external environment has become more complex and severe.However, my country adheres to the efficient coordination of epidemic prevention and control and economic and social development. The fundamentals of strong economic resilience, sufficient potential and long-term improvement have not changed, which is conducive to the overall stability of the scale of foreign exchange reserves.
(Editor in charge: Hua Qingjian)
