01,Foreign reserves drop by 50 billion

The US dollar is the culprit behind the global financial market's turmoil.

During this period,the Federal Reserve is planning to restart significant interest rate hikes,which has directly led to a decrease in our country's foreign exchange reserves.

Last month's foreign exchange reserve data has just been released and has attracted the attention of many professionals,with a drop of 51.3 billion US dollars compared to the previous month.

The rise of the US dollar is the main culprit,with a nearly 3% increase in February this year,causing the currencies of several countries to fall to varying degrees,among which the Japanese yen has fallen more and is getting closer to 140.

Because our country's foreign exchange reserves include not only US dollar assets but also assets in other currency forms,due to the depreciation of non-US dollar exchange rates,these assets have all shrunk to some extent when converted into US dollar terms.

02,Increase in gold holdings

However,the latest data on gold holdings released by the central bank last month reached nearly 65 million ounces,a full 800,000 more than in January,which is quite encouraging.

In fact,from November last year to February this year,the central bank's gold reserves have been growing in an orderly manner.

The central bank's gold appreciation data over the past few months also directly reflects the excellent performance of our country's foreign exchange reserves.At this stage,the central bank's decision to gradually sell US bonds and focus on storing gold is a wise move.Ten years ago,the central bank held a large amount of U.S.Treasury bonds,but since then,the quantity of U.S.Treasury bonds held by the central bank has been declining year by year,with a total reduction of 35%.

In contrast,the reserves of gold have been increasing annually since ten years ago.As of today in 2023,the increase has been nearly 80 billion U.S.dollars,which is a considerable figure.

Compared to U.S.Treasury bonds,gold is an absolutely reliable investment.

03,Continuously Adjusting Structure

China's foreign exchange reserves are continuously undergoing optimization and adjustment of asset structure.Selling U.S.Treasury bonds is a way to reduce dependence on the U.S.dollar,while increasing gold holdings is to provide a more solid credit foundation for the currency.

Although we have seen fluctuations in foreign exchange reserves in the short term,these are merely numerical fluctuations and do not reflect changes in the actual state of assets.

China's trade surplus remains very large,with an increase of over 16% in the surplus in the first two months of this year compared to the same period last year.This increase implies that foreign exchange assets are growing,and this will not change due to the appreciation or depreciation of the U.S.dollar.

However,at the same time,we need to pay attention to guiding expectations for exchange rates.

A while ago,the Chinese yuan appreciated significantly,causing many enterprises to slow down their pace of settlement.Now,the offshore exchange rate of the yuan against the U.S.dollar is approaching 7.0 again,which is an excellent window for enterprises holding a large amount of foreign exchange to settle.

But without proper guidance,enterprises may still be waiting and hoping for the exchange rate to fall further,waiting for a more profitable timing to appear.We need to make it clear to everyone that although exchange rates fluctuate in both directions,the overall trend should still be dominated by the appreciation of the renminbi.Therefore,we cannot keep waiting; instead,we should seize the current opportunity to settle foreign exchange.

Of course,a large amount of settlement also greatly helps the renminbi exchange rate to strengthen.