The global pandemic has been unreasonable with the Asian giant. For as the epicenter of the disease, accusatory investor sentiment haunts the country. However, China’s foreign exchange reserves are on the rise, after a dismal period in the Forex market.
Adding to this, China’s tensions with the United States, did not promise that the Asian currency would perform well. This is beyond the certain spikes in good performance that have been driving the operations of investors.
However, political tensions and the global crisis seem to have no weight on China. This has led to a significant increase in foreign exchange reserves.
Can the Yuan displace the Dollar as a safe haven?
A four-month upward streak in foreign exchange reserves
The Asian giant continues to make its presence felt in the midst of the upsurge in tensions with the United States.
Its foreign currency reserves, the largest in the world, grew at a much faster rate than expected in July. At the same time, the 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 Foreign Exchange Administration (SAFE).
China’s foreign exchange reserves are up by four months, promising a possible improvement in the Yuan in the Forex market.
China’s foreign exchange reserves rise by 4 months, promising a possible improvement of the Yuan in the Forex market. Source Trading Economics
The increase in foreign exchange reserves was the result of multiple factors, including exchange rates and fluctuations in asset prices, said Wang Chunying, a spokesman for SAFE.
„As major economies intensified fiscal stimulus and maintained loose monetary policies, non-dollar currencies strengthened, and overall asset prices in these countries rose,“ Wang said.
These factors make it clear why China’s foreign The News Spy exchange reserves were on a four-month upward streak in July.
The Asian country appears to have made great strides in planning for COVID-19 control and social and economic development. In addition to good management of international political tensions.
Reserve assets: Gold continues to rise in the asset market
Is the Chinese Yuan a safe currency now?
More positive news from China regarding the Yuan, though. Some analysts believe that the figures provided by the Chinese communist economic bureau to the outside world cannot be fully trusted.
You have to take this data with numbers and analyze well future results in the Forex market.
Despite China’s achievements in coordinating the control of COVID-19 and social and economic development, the international economic and financial situation remains serious and complex, with instability and uncertainty still prominent, Wang said.
This shows that the Asian giant has managed to handle the crisis situation in the right way. However, much uncertainty remains in the air, and in this way, directly affects the Chinese Yuan.
Will there be an early recovery in the Chinese economy that will allow a rise in the Chinese Yuan? Let us know your thoughts in the comment box.