The global pandemic has been unreasonable with the Asian giant. Because being the epicenter of the disease, the accusatory sentiment of investors stalks the country. However, China’s foreign exchange reserves are on the rise after a gloomy period in the Forex market.
Added to this, China’s tensions with the United States did not promise that the Asian currency would perform well. This goes beyond the certain peaks of good performance that investors have been handling in operations.
However, political tensions and the global crisis seem to weigh down on China. Well, this is how they have achieved that the foreign exchange reserves register a significant increase.
A rising streak of up to 4 months in foreign exchange reserves
The Asian giant continues to be noted in the midst of a rise in tensions with the United States.
Well, its foreign exchange reserves, the largest in the world, grew at a much higher rate than expected in July. In turn, gold reserves benefited from a good performance as a safe haven asset.
The country’s foreign exchange reserves expanded to $ 3.1544 trillion at the end of July, from $ 3.1123 trillion at the end of June, official data showed on Friday.
The amount increased by $ 42.1 billion, or 1.4 percent, since the end of June, according to the State Administration of Foreign Exchange (SAFE).
The increase in foreign exchange reserves was the result of multiple factors, including exchange rates and fluctuations in asset prices, said Wang Chunying, a SAFE spokesman.
“As major economies stepped up fiscal stimulus and maintained flexible monetary policies, non-dollar currencies strengthened, and overall asset prices in these countries rose”said Wang.
From these factors it is clear why China’s foreign exchange reserves hit a four-month upward streak in July.
Since, apparently, the Asian country made great strides in planning for COVID-19 control and social and economic development. In addition to the good handling of international political tensions.
Is the Chinese Yuan now a safe currency?
Although more has been the positive news from China regarding the Yuan. Some analysts believe that the figures that the Chinese communist economic bureau provides abroad cannot be fully trusted.
You have to take these data with figures and analyze well future results in the Forex market.
Despite the achievements that China made in coordinating COVID-19 control and social and economic development, the international economic and financial situation remains dire and complex, with instabilities and uncertainties still prominent, Wang said.
In this way, you can see that the Asian giant has managed to handle the crisis situation in a correct way. However, much uncertainty remains in the air, and in this way, it directly affects the Chinese Yuan.
Will there be a speedy recovery in the Chinese economy that allows a rise in the Chinese Yuan? Let us know your thoughts in the comment box.