Foreign Exchange Reserves Rose by USD 29.919 Billion in August as Central Bank Adds Gold for Tenth Consecutive Month

On September 7, the State Administration of Foreign Exchange reported that China’s foreign exchange reserves reached USD 3,322.154 billion at the close of August 2025, reflecting an increase of USD 29.919 billion, or 0.91%, compared to the end of July.

The administration attributed the monthly rise to evolving expectations around monetary policy in major economies and shifts in macroeconomic indicators, which contributed to a decline in the U.S. dollar index and a rise in global asset prices. These factors, combined with exchange rate movements and valuation gains, supported the overall growth in reserves.

Guan Tao, Global Chief Economist at Bank of China International, noted that the weakening dollar and broad market recovery led to favorable valuation effects, as non-dollar currencies appreciated and financial assets gained value. By the end of August, China’s reserves had exceeded USD 3.3 trillion, marking the highest level since January 2016 and reinforcing the country’s capacity to absorb external shocks.

In the first half of the year, monthly reserve changes included increases of USD 6.679 billion, USD 18.2 billion, USD 13.441 billion, USD 41 billion, USD 3.6 billion, and USD 32.167 billion. These gains were followed by a decline of USD 25.187 billion in July and a rebound of USD 29.919 billion in August.

The State Administration of Foreign Exchange emphasized that the Chinese economy continues to demonstrate resilience and dynamism, providing a stable foundation for maintaining reserve levels.

Wang Qing, Chief Macro Analyst at Oriental Jincheng Credit Rating, commented that despite external uncertainties, China’s reserves are expected to remain generally stable. He added that maintaining sufficient reserves will help support a balanced exchange rate for the renminbi and serve as a buffer against external risks.

On the same day, the People’s Bank of China released figures showing that official gold reserves stood at 74.02 million ounces at the end of August, an increase of 60,000 ounces from July. This marks the tenth consecutive month of net gold purchases since the central bank resumed buying in November.

Guan also highlighted that China’s approach to diversifying its reserve assets has remained consistent amid global volatility. In August, expectations of U.S. interest rate cuts contributed to a 3.9% rise in London spot gold prices—the strongest monthly performance since May. China’s gold holdings increased by USD 9.9 billion to USD 253.8 billion, raising gold’s share of total reserves by 0.23 percentage points to 7.64%, a new record high.