Google Advertisement
Beijing, Oktober 8, 2026 – China’s foreign exchange reserves slipped in September, reflecting the impact of a stronger U.S. dollar and weaker global asset prices.
The State Administration of Foreign Exchange (SAFE) announced that reserves stood at US$3.4003 trillion at the end of September 2026, down US$38.1 billion from August, marking a 1.11% decline.
SAFE explained that the drop was driven by exchange rate movements and asset price changes, as the dollar gained strength following the U.S. Federal Reserve’s latest rate hike.
The Fed raised interest rates by 25 basis points to 3.75 to 4%, fueling expectations of further tightening and pushing yields higher, which in turn pressured global bond valuations.
Google Advertisement
Economists noted that the decline is more a reflection of external financial conditions than domestic weakness.
Wen Bin, chief economist at China Minsheng Bank, said the fall was largely due to market anticipation of continued Fed tightening.
He emphasized that rising U.S. yields and a stronger dollar have weighed on global bonds, reducing the value of reserve assets.
Despite the short term setback, SAFE highlighted that China’s economy remains fundamentally resilient.
The agency pointed to structural strengths, new growth drivers, and high-quality development as factors underpinning long-term stability.
Analysts also stressed that exports continue to serve as a crucial anchor for the balance of payments, helping to offset reserve fluctuations.
China’s gold reserves provided a notable counterbalance.
Holdings rose to 77.47 million ounces, an increase of 740,000 ounces from August.
This marks the 23rd consecutive monthly rise, underscoring Beijing’s strategy to diversify away from dollar assets and hedge against currency volatility.
Looking ahead, risks remain. With the Fed’s “dot plot” signaling another rate hike before year end, global capital flows are expected to stay volatile.
For China, the challenge lies in managing external pressures while sustaining domestic growth momentum.
Still, the steady accumulation of gold reserves reflects Beijing’s intent to strengthen financial security.
By diversifying its holdings, China signals a long-term strategy to reduce reliance on dollar-denominated assets.
At US$3.4 trillion, China retains the world’s largest reserve stockpile, a buffer that provides confidence amid global uncertainty.
The September decline highlights the impact of shifting monetary conditions abroad, but also the adaptability of Beijing’s reserve management strategy.
