(Yicai Global) Oct. 8 -- China’s foreign exchange reserves edged down in September due to US dollar appreciation and other factors, but stayed above USD3.2 trillion for the fifth straight month, new official data showed.

China’s foreign exchange reserves totaled USD3.2006 trillion at the end of September, a drop of USD31.5 billion or 0.97 percentage point from the month earlier, according to figures the State Administration of Foreign Exchange released yesterday.

The US dollar index rose, which had the effect of weakening non-dollar currencies, SAFE spokesperson Wang Chunying said in a press release the same day. Also, the value of major countries’ financial assets declined in September, affected by the ongoing Covid-19 pandemic and monetary policies, Wang added. 

China’s economic fundamentals continue to improve and have the foundation to remain stable in the long run, Wen Bin, chief researcher of China Minsheng Bank, told Yicai Global.

The US Dollar Index rose 1.7 percent to 94.2 last month, and other currencies weakened against the greenback. The British pound fell 2 percent, the euro dropped 1.9 percent, and the Japanese yen dipped 1.1 percent.

The pandemic is still evolving, posing challenges for the global economic recovery and triggering more uncertainties in the international financial market, Wang said. But the Chinese economy will remain vigorous in the long term, showing the resilience of the country’s economic development, which is conducive to maintaining the overall stability of foreign exchange reserves.

China’s forex reserves will continue to remain stable, Wen said. But the evolving pandemic could still impact the economic recovery and there are many other areas of uncertainty, he said, noting that changes in the Federal Reserve’s monetary policy could lead to a more volatile global financial market.

Editor: Tom Litting