China's foreign exchange reserve delivers stable income

Updated: Jul 28, 2019 By Chen Jia Print
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A cashier counts currency notes at a branch of Bank of China in Lianyungang, Jiangsu province. [Photo provided to China Daily]

China's foreign exchange reserve, the world's largest, achieved a 3.68 percent 10-year average rate return from 2005-2014, according to data released on Sunday for the first time by the country's foreign exchange regulator, the State Administration of Foreign Exchange (SAFE).

The investment return was relatively strong compared with other global foreign exchange management institutions, which has resulted in stable long-term income, SAFE said.

Foreign exchange reserves denominated by the US dollar by 2014 accounted for 58 percent of the total volume, down from 79 percent in 1995.

US dollar-denominated foreign reserves were 65 percent of the global total by 2014, according to the data SAFE published in its 2018 Annual Report.

It was also the first time that SAFE disclosed data on the foreign exchange reserve's currency structure, according to a statement.

"China's foreign exchange reserve currency structure is diversified, even more diversified than the world's average level," said Wang Chunying, a SAFE spokesperson.

"It is in line with requirements of China's foreign economic and trade development, as well as the demand of international payment."

The diversified currency structure is also consistent with global trends, which is helpful to reduce risk, said Wang.

Crucial to managing the world's largest foreign reserve is maintaining a balance of international payments and a stable exchange rate to safeguard national financial security, said SAFE.

As of the end of June, China's foreign exchange reserve stood at $3.12 trillion, up from $3.10 trillion by May, the central bank said.

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