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24 Jan, 2021 06:26

China’s forex reserves grow by over $100 BILLION in 2020 despite Covid-19 pandemic

China’s forex reserves grow by over $100 BILLION in 2020 despite Covid-19 pandemic

China boosted its foreign exchange reserves by $108.6 billion last year to $3.22 trillion, in spite of the economic fallout of the coronavirus crisis, data from the State Administration of Foreign Exchange (SAFE) showed.

The head of the China Forex Investment Research Institute, Tan Yawen, explained to the Global Times that the strengthening of non-dollar currencies, notably the Australian dollar and the Canadian dollar over the past year, has resulted in higher yields and increased China’s foreign reserves. The jump was also due to the country’s fast-paced work and production resumption, he said.

The increase exceeded estimates in early 2020 when the epidemic stoked fears of industrial capital outflows, according to Tian Yun, vice director of the Beijing Economic Operation Association. “China’s effective virus containment measures means the country has been a must-have option for global industries seeking a safe haven against ‘Black Swan’ events such as the Covid-19 pandemic,” Tian said.

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China’s forex market in 2020 was generally stable with rational and orderly exchanges, SAFE spokesperson Wang Chunying said, adding that the appreciation of the yuan has not changed the overall balance of cross-border capital flows in the country.

The average central parity rate of the yuan against the US dollar in 2020 was 6.8974, which is basically the same as the 2019 average. The renminbi has remained stable against all major global currencies.

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