The central bank:Foreign exchange reserves exceeded $3.3 trillion at the end of August.

    The State Administration of Foreign Exchange (SAFE) released the latest statistical data on September 7, showing that China's foreign exchange reserves stood at $3.3222 trillion as of the end of August 2025, an increase of $29.9 billion or 0.91% from the end of July. This marks the second consecutive month that reserves have surpassed the $3.3 trillion threshold since the end of June.

    Regarding the monthly fluctuation in foreign exchange reserves, SAFE noted that in August, influenced by factors such as monetary policy expectations in major economies and macroeconomic data, the U.S. dollar index declined while global financial asset prices generally rose. The combined effects of exchange rate conversions and asset price changes contributed to the increase in foreign exchange reserves for the month.

    Updated official reserve asset data showed that China's official gold reserves reached 74.02 million ounces at the end of August 2025, an increase of 60,000 ounces from the previous month. The People's Bank of China has now increased its gold holdings for ten consecutive months.

    Foreign Exchange Reserves Surpass $3.3 Trillion

    Over the past month, driven by factors including the decline in the U.S. dollar index and the overall rise in global financial asset prices, China's foreign exchange reserves increased month-on-month, surpassing the $3.3 trillion threshold again following the end of June.

    Denominated in U.S. dollars, foreign exchange reserves benefited from the U.S. dollar index's cumulative decline of approximately 2.2% since August, which boosted the value of non-dollar assets within China's reserves. Simultaneously, heightened expectations for Federal Reserve interest rate cuts drove broad gains in major global stock indices and declines in U.S. Treasury yields, further boosting the value of global financial assets within China's reserves.

    The August decline in the U.S. dollar index was primarily influenced by weaker-than-expected U.S. economic data released that month and renewed market anticipation of Fed rate cuts. Over the past month, the latest U.S. nonfarm payroll figures fell significantly below market expectations, reflecting recent weakness in the U.S. labor market. Meanwhile, stabilizing U.S. inflation levels eased market concerns about inflation. Federal Reserve Chair Jerome Powell's remarks at the Jackson Hole central bank symposium further reinforced market expectations for a Fed rate cut in September.

    Looking ahead, the pace of Fed rate cuts remains highly uncertain. The National Economic Research Center at Peking University notes that despite heightened market expectations for a September cut, rising inflation since April and persistently low unemployment suggest actual economic data does not yet support initiating rate cuts.

    China's foreign exchange reserves have remained above $3.2 trillion for the 21st consecutive month. The State Administration of Foreign Exchange (SAFE) noted that China's economy has demonstrated steady progress, robust resilience, and vitality, providing a solid foundation for maintaining the basic stability of foreign exchange reserves. Wen Bin, Chief Economist at China Minsheng Bank, also stated that China's increasingly diversified regional trade layout, continuously optimized trade structure, and growing appeal of RMB assets to international capital all contribute to the fundamental stability of foreign exchange reserves.

    “Against the backdrop of heightened external volatility, moderately ample foreign exchange reserves will provide crucial support for maintaining the RMB exchange rate at a reasonable and balanced level, while also serving as a ballast against various potential external shocks,” Wang Qing, chief macro analyst at Orient Gold Credit, told Securities Times. Considering all factors, he expects the foreign exchange reserve level to remain fundamentally stable going forward.

    The central bank has increased its gold holdings for 10 consecutive months.

    Updated official reserve asset data showed that China's official gold reserves reached 74.02 million ounces at the end of August 2025, an increase of 60,000 ounces from the previous month. The central bank has now increased its gold holdings for ten consecutive months.

    Beyond heightened global political and economic uncertainties, the erosion of the Federal Reserve's independence also drove August's international gold prices to surge significantly from already record highs. In Wang Qing's view, this suggests that international gold prices are more likely to rise than fall in the near term. From a cost control perspective, the necessity to pause gold accumulation has diminished, while the demand to increase gold holdings for optimizing the international reserve structure has risen.

    Since March, the People's Bank of China has made modest monthly additions to its gold reserves, with each increase below 100,000 ounces. As a unique asset, gold helps regulate and optimize the overall risk-return characteristics of international reserve portfolios. A recent World Gold Council report indicates that despite slowing growth rates, global central bank gold purchases remain at notably elevated levels.

    “The proportion of gold in China's official international reserve assets is significantly below the global average,” Wang Qing stated. From the perspectives of optimizing the international reserve structure, steadily advancing the internationalization of the renminbi, and responding to current changes in the international environment, the central bank's future gold accumulation remains a major direction.