In September, the global stock, bond, and exchange rate markets experienced a "triple rise," benefiting from which, China's foreign exchange reserves increased by $28.2 billion compared to the end of the previous month, marking a continuous increase for the third consecutive month.

On October 7th, the State Administration of Foreign Exchange released the latest foreign exchange reserve data. As of the end of September 2024, China's foreign exchange reserves stood at $3.3164 trillion, a rise of 0.86% compared to the end of August.

Boc International Securities' Global Chief Economist Guan Tao stated that the continued increase in China's foreign exchange reserves in September mainly reflected the positive valuation effects of factors such as exchange rate conversion and asset price changes, against the backdrop of the Federal Reserve's unconventional interest rate cut of 50 basis points, leading to the "triple rise" in global stock, bond, and exchange rate markets.

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In terms of currency, the US Dollar Index (DXY) experienced a "triple monthly decline," falling further by 0.9% to 100.8, reaching a new low for the year, with non-US dollar currencies generally appreciating against the US dollar; in terms of assets, the yield on 10-year US Treasury bonds experienced a "five-month decline," setting a new low for the year, and the dollar-denominated hedged global bond index rose by 1.2% in the month, while the S&P 500 stock index further rose by 2.0%, reaching a historical high.

Currently, the external environment is becoming more complex and severe, with the economic performance of major economies showing some divergence, and the volatility in international financial markets remains high.

In September, the Federal Reserve officially launched this round of the interest rate reduction cycle, but it does not rule out that market expectations will continue to switch between scenarios of a "soft landing," "hard landing," and "no landing" for the US economy. The uncertainty surrounding the pace and intensity of the data-driven Federal Reserve interest rate policy remains high, and coupled with the impact of geopolitical conflicts and trade frictions, volatility in international financial markets is inevitable, which will continue to disturb the scale of China's foreign exchange reserves.

However, Guan Tao stated that since the end of September, as China's package of policies to increase counter-cyclical adjustments and prevent and resolve risks in key areas have taken effect, the domestic economy has continued to rebound and improve, the pressure of unilateral adjustment on the renminbi exchange rate has been alleviated, the supply and demand situation of foreign exchange within the country has improved, and China's foreign exchange reserve scale is expected to remain basically stable.

China Minsheng Bank's Chief Economist Wen Bin stated that China's export situation is stable and improving, with the competitiveness of foreign trade "new three items," ships, and other products becoming increasingly strong. New forms of foreign trade such as cross-border e-commerce, market procurement, and overseas warehouses continue to emerge, and trade partnerships with countries along the "Belt and Road" are becoming increasingly close. Exports maintain medium to high-speed growth, continuing to play a fundamental role in stabilizing cross-border capital flows. At the same time, with the introduction of a package of policies exceeding expectations in currency, real estate, and capital markets, market confidence has been significantly boosted, and international investors are accelerating their layout of Chinese assets, which also provides strong support for the stability of the foreign exchange reserve scale. Currently, the renminbi exchange rate is stable with an upward trend, and the bank's foreign exchange settlement has turned into a surplus, and the foreign exchange market will continue to operate smoothly. The above factors will provide support for maintaining the basic stability of China's foreign exchange reserve scale.

At the end of September, China's total gold reserves were 72.8 million ounces, remaining unchanged for five consecutive months. However, against the backdrop of the international gold price continuously setting historical highs, China's gold reserves valued in US dollars reached $191.5 billion, an increase of $8.5 billion month-on-month. During the same period, the ratio of China's gold reserves to the scale of foreign exchange reserves was 5.8%, 2.4 percentage points higher than at the end of October 2022 (just before the last continuous increase in gold reserves).