China's June forex reserves fall more than expected to US$3.071 trillion

CHINA'S foreign exchange reserves fell more than expected in June, official data showed on Thursday (Jul 7), as the US dollar climbed against other major currencies.

The country's foreign exchange reserves - the world's largest - fell US$56.5 billion to US$3.071 trillion last month, compared with US$3.113 trillion tipped by a Reuters poll of analysts and US$3.128 trillion in May.

For the first half of 2022, China's foreign exchange reserves fell US$178.9 billion, data from the central bank showed, inching towards a closely watched threshold at US$3 trillion.

The State Administration of Foreign Exchange (Safe) said in a statement that the 1.8 per cent drop in June reserves mainly reflected valuation effects, as the US dollar rose and global asset prices fell sharply amid worries over inflation and the growth outlook.

"At present, global economic growth has slowed, inflation remains high, international financial market volatility has increased, and the external environment has become more complex and severe," Safe said.

But China's resilient economic fundamentals and long-term growth potential will help to keep the country's foreign exchange reserves largely steady, the regulator said.

The yuan fell 0.4 per cent against the US dollar in June, while the US dollar rose 2.9 per cent in June against a basket of other major currencies.

China held 62.64 million fine troy ounces of gold at the end of June, unchanged from end-May.

The value of China's gold reserves fell to US$113.82 billion at the end of June from US$115.18 billion at end-May. REUTERS