China’s Forex Reserves at $3.4003 Trillion, Down $38.1 Billion in September

China’s foreign exchange reserves were $3.4003 trillion at the end of September, the State Administration of Foreign Exchange (SAFE) said on 7 October. That is $38.1 billion, or 1.11%, lower than at the end of August. SAFE attributed the fall to a stronger US dollar index combined with declines in major global financial asset prices.

By FOCUS BUSINESS editorial staff

Still above $3.4 trillion

According to SAFE, reserves at the end of September were $3.4003 trillion, down $38.1 billion or 1.11% from the previous month. The total remains around the $3.4 trillion level.

Exchange rates and asset prices

Reserves are reported in US dollars, so changes in the value of non-dollar currencies, bonds and equities held show up in the headline figure. SAFE said the dollar index rose in September and major global financial assets generally fell, and that exchange-rate translation and asset-price changes together drove the decline.

Business Checkpoints

Reserves are a macro indicator, but how the yuan moves while the dollar is strong directly affects exchange gains and losses and settlement costs for Korean companies in China. Firms that pay or receive in dollars may want to review settlement timing and hedging before quarter-end.

One month of data does not set a direction. Reserve changes are often driven by valuation effects, as this month, so it is safer to read them alongside October data and the yuan’s exchange-rate path.

※ This article is based on figures released by China’s State Administration of Foreign Exchange and on media reports.