The decline came as the US dollar index rose and prices of major global financial assets generally fell amid changes in the global macroeconomic environment and monetary policies in major economies, SAFE said in a press statement. The combined impact of exchange-rate movements and changes in asset prices led to the drop in reserves during the month.
China’s foreign exchange reserves fell by $38.1 billion, or 1.11 per cent, from end-August to $3.4003 trillion at the end of September 2026, SAFE data showed.
SAFE cited exchange-rate movements and asset-price changes as the US dollar index rose and major global financial assets generally declined.
Gold reserves rose by 740,000 ounces to 77.47 million ounces.
Wen Bin, chief economist at China Minsheng Bank, said the fall occurred against a backdrop of rising expectations for tighter US monetary policy.
The US Federal Reserve raised its benchmark overnight interest rate by 25 basis points in September to a range of 3.75 per cent to 4 per cent, its first rate increase of the year, said Chinese media citing Wen.
Wen further said that Fed’s latest dot plot pointed to another rate increase by the end of the year, while hawkish remarks from Fed officials further strengthened market expectations for additional tightening.
He added in that setting, global bonds, including US Treasuries, came under selling pressure, pushing yields higher and lifting the US dollar index. A stronger dollar and declines in prices of some global financial assets exerted valuation pressure on China’s foreign exchange reserves.
Despite the decline, SAFE said China’s economy had remained generally stable, with stronger new growth drivers, an improving economic structure and continued progress in high-quality development, providing support for the country’s foreign exchange reserves to remain broadly stable.
Wen also said China’s exports were expected to remain resilient and continue to serve as a key anchor for the country’s balance of payments.
The data also showed China’s gold reserves stood at 77.47 million ounces at the end of September, up 740,000 ounces from the end of August. The increase marked the 23rd consecutive month that the People’s Bank of China had added to its gold holdings.
Fibre2Fashion News Desk (SG)
