China's forex reserves edge down in September

BEIJING, Oct. 7 (Xinhua) -- China's foreign exchange reserves edged down 0.7 percent, or 22.7 billion U.S. dollars from a month earlier, to 3.087 trillion U.S. dollars by the end of September, the central bank said Sunday.

Wang Chunying, spokesperson of the State Administration of Foreign Exchange, attributed the contraction to a number of factors including exchange rate conversion and changing asset prices.

"Bonds usually take up a large portion of many countries' forex reserves," said Zhao Qingming, chief economist of derivatives institute of China Financial Futures Exchange. "The interest rate hike by the Federal Reserve has led to declines in bond prices across the world, which also influenced the assest reassessment of China's forex reserves."

In addition, Japanese yen weakened over 2 percent, resulting in write-downs in the yen assets China held with its forex reserves.

According to Zhao's estimates, China's forex reserves lost about 10 billion U.S. dollars in book value because of the weakening of yen.

Guan Tao, senior researcher of China Finance 40 Forum, said that the losses would have little impact on the practical value of China's forex reserves, unless China sold out those assets.

Although the external environment still shows lots of uncertainties, the stable fundamentals of China's economy will provide solid foundation for the steady operation of China's forex market, said Wang.

Wang forecasted that under the combined effects of domestic and foreign factors, China's forex reserves is expected to maintain its stability amid fluctuations.