China’s foreign exchange reserves fell in April by the biggest amount in more than five years, official data showed on Saturday.
The country’s foreign exchange reserves – the world’s largest – fell $68 billion in April, to $3.12 trillion from $3.188 trillion in March, the biggest monthly drop since November 2016.
Analysts polled by Reuters had expected the reserves to fall to $3.133 trillion in April.
The State Administration of Foreign Exchange (SAFE) said in a statement that the 2% drop in April reserves from March mainly reflected valuation effect as the dollar gained against other major currencies, and changes of global asset prices.
“In April 2022, China’s cross-border funds generally continued the trend of net inflows, and the supply and demand in the domestic foreign exchange market remained basically balanced,” SAFE said.
Yuan Falls 4% Against Dollar
The yuan fell 4% against the dollar in April, while the dollar rose 5% in April against a basket of other major currencies.
Overseas investors extended their selling of Chinese shares into April on mounting worries about the impact of prolonged Covid-19 lockdowns and the fallout of the Russia’s invasion of Ukraine.
China’s foreign exchange reserves dropped $130 billion in the first four months, the official data showed. They had climbed $33.6 billion in 2021.
China held 62.64 million fine troy ounces of gold at the end of April, unchanged a month earlier. The value of China’s gold reserves fell to $119.73 billion at the end of April from $121.66 billion at the end of March.
- Reuters, with additional editing by George Russell
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