Analysts at ING bank note that China’s most recent foreign reserves show net inflows.
China’s forex reserves rise to highest since April 2018 – Bloomberg
Key Quotes:
“Foreign reserves on the rise
China’s foreign reserves have only edged down slightly in one month this year (April). In June, reserves increased by another US$18.23 billion to US$3119.23 billion, the largest monthly increase this year.
Inflows have been stronger than outflows
China has been very closely monitoring capital outflow transactions, which helps explain the low net outflows in 2019. But this is only one side of the story.
Another is the weak dollar: This increases the USD holdings of other currencies and therefore raises the value of China’s foreign reserves. This could be increased further as China has shifted to greater non-USD holdings in its FX reserves this year.
A more important factor is the inclusion of China assets in global benchmark indices.”
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