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cailianshe news, september 7 (reporter wang hong)affected by exchange rate conversion and asset price changes, my country's foreign exchange reserves reached us$3,288.2 billion at the end of august, up us$31.8 billion from the end of july. this is the second consecutive month of significant increases in foreign exchange reserves. experts said that the current foreign exchange reserves of around us$3 trillion are moderately sufficient and are expected to remain stable at a level slightly above us$3 trillion for some time to come.

the latest data also shows that the people's bank of china continued to suspend its gold holdings in august, which is the fourth consecutive month since may. experts believe that this is due to the historically high gold prices. experts also believe that considering that the gold price will continue to run at a high level of $2,000 per ounce, it is unlikely that the people's bank of china will resume increasing its gold holdings in the short term.

foreign exchange reserves increased by another us$31.8 billion in august, climbing sharply for two consecutive months

data shows that as of the end of august 2024, my country's foreign exchange reserves were us$3,288.2 billion, an increase of us$31.8 billion from the end of july, an increase of 0.98%.

"in august, u.s. inflation fell more than expected and non-farm employment fell short of expectations. the market bet on a 50bp rate cut in september, which pushed the u.s. dollar index to weaken and global asset prices to rise. in terms of exchange rates, the u.s. dollar index fell 2.3% to 101.7, and major non-u.s. dollar currencies all rose," said wen bin, chief economist of china minsheng bank. affected by exchange rate conversion and changes in asset prices, foreign reserves increased by us$31.8 billion at the end of august compared with the end of july.

wang qing, chief macro analyst at orient securities, pointed out that the foreign exchange reserves increased by 0.98% in august, which was a significant increase for two consecutive months. among them, it is estimated that the depreciation of the us dollar in august directly led to an increase of about us$28 billion in my country's foreign exchange reserves. in august, except for the decline of the japanese stock market, the us and european stock markets generally rose. therefore, the overall rise in global financial asset prices in that month will also have a positive impact on the value of my country's foreign exchange reserve assets.

wen bin also said that multiple favorable factors support the export to maintain medium-to-high growth, and continue to play a basic role in stabilizing cross-border capital flows. at the same time, foreign institutional investors continue to be optimistic about my country's capital market, and the amount of chinese bonds held hit a new historical high, which also supports the stability of foreign exchange reserves. in the next stage, my country's economy will continue to recover and improve, which is a solid foundation for maintaining an overall balance in the balance of payments and is conducive to the basic stability of foreign exchange reserves.

"my country's current foreign exchange reserves of around us$3 trillion are moderately abundant. it is expected that my country's foreign exchange reserves will continue to stabilize at a level slightly above us$3 trillion for some time to come, which will provide a solid foundation for the rmb exchange rate to remain at a reasonable and balanced level," wang qing believes.

after four consecutive months of suspension, it is unlikely that gold will resume its purchase in the short term

the latest data from the central bank today also showed that as of the end of august 2024, my country's central bank gold reserves were 72.8 million ounces, the same as last month. in may this year, the central bank ended its previous "18 consecutive increases" in gold reserves, and the scale of gold reserves has remained at 72.8 million ounces since then.

the size of official gold reserves has remained unchanged since may. wang qing believes that the reason behind this is that the current gold price is at a historical high. the central bank's appropriate adjustment of the pace of holdings will help control costs. "considering that the gold price will remain at a high level of more than $2,000 per ounce for a period of time, it is expected that the central bank is unlikely to resume increasing its gold holdings in the short term."

why do central banks reserve gold? compared with other assets, what are the advantages of gold investment? wang lixin, ceo of the world gold council in china, told cailianshe reporters that gold can provide long-term returns. since the collapse of the bretton woods system, the annualized return on gold has exceeded 8%. gold is also an effective risk diversification tool. not only is it less correlated with most other major assets, but its negative correlation with stocks and other risky assets will increase as these assets are sold off. in high-risk periods, gold performance continues to benefit from the "risk-averse trend" of market funds.

"the gold market is a market with considerable depth and high liquidity," wang lixin also stressed, which can easily accommodate large numbers of institutional investors who buy and hold gold. in sharp contrast to many financial markets, gold's liquidity will not dry up even in periods of severe financial stress.

looking ahead to the future gold reserve strategy of the people's bank of china, wang qing pointed out that from the perspective of continuously optimizing the international reserve structure and steadily and prudently promoting the internationalization of the rmb, the central bank's increase in gold holdings will still be the general direction in the future.