Foreign Exchange Reserves (MoM)

The Foreign Exchange Reserves report, released by the State Administration of Foreign Exchange, presents the total amount of foreign currency held by a government. It measures foreign currency assets national monetary authorities hold and can be readily convertible. Narrowly speaking, foreign exchange reserves are an important part of a country’s economic strength, the accumulated foreign currency can be used by a country to balance international trade, keep exchange rate stable and repay external debt. Broadly speaking, the foreign exchange reserves refers to foreign currency denominated assets, including cash, foreign bank deposits, foreign securities, etc. A high reading is seen as positive (or bullish) for the CNY, while a low reading is seen as negative (or Bearish) for the CNY.