On Sunday, data from China’s State Administration of Foreign Exchange (SAFE) had unveiled that the world’s second-largest country’s FX reserves rose in October on a month-on-month (MoM) basis for the first time since July, largely driven by a slip in US Dollar against a basket of six major currencies.
Besides, citing a through and through optimism over a recent rise in China’s foreign reserve, the world’s largest, the SAFE said in a statement following release of the data, “Despite the recurring COVID-19 pandemic and uncertainties among global economic recovery...China's economy continues to recover with strong resilience and huge potential, which would provide support for maintaining overall stability in the scale of foreign exchange reserves”.
China’s FX reserves rise in October, gold reserves unchanged
According to data from SAFE, China’s FX reserves soared to $3.218 trillion as of end-October, up about 0.53 per cent on a month-on-month basis, beating an analysts’ forecast of $3.128 trillion, while Beijing’s FX reserves stood marginally higher from a $3.128 trillion logged at the same time a year earlier.
Nevertheless, the US Dollar Index (DXY) measured against a basket of six major currencies dipped 0.1 per cent in October. Apart from that, China’s gold reserves remained unchanged at 62.64 million fine troy ounce as of end-October, though value of the world’s No 2 economy’s gold reserves soared to $110.83 billion from a $109.18 billion registered in September.
If truth is to be spoken, both spot gold and US gold futures had soared significantly last month amid uncertainties over the US Fed’s bond tapering timeline alongside an increase in volatility in US Treasury Yields.