Affected by the continuous appreciation of the US dollar, China's foreign reserves decreased by $26.4 billion.
But at the same time, we also actively sold $61.7 billion in US Treasuries.
The United States always wants to avoid the economic crisis by harvesting other countries, and China has made it clear that it wants to develop into a financial power
From the official data, we can see that by the end of October, China's foreign exchange reserves decreased by 26.4 billion US dollars compared with the beginning of this year. This is closely related to the appreciation of the dollar.
China's foreign exchange reserves include a variety of currency assets, due to the continuous appreciation of the US dollar, the value of other non-US currencies is relatively high, which has led to a decrease in the assets other than the US dollar in China's foreign reserves.
A clear example is the yen, which has gained almost 15% so far this year. This kind of ** has led to a decrease in the value of assets other than US dollars in China's foreign reserves when they are converted to US dollars.
It is important to note that this is only a loss at the time of exchange rate conversion, not a real loss of assets. When a non-US currency depreciates, the value of the actual asset does not decrease materially, although the value decreases when converted into US dollars.
Moreover, the amount of reduction is relatively small. Since the beginning of this year, foreign exchange reserves have fallen by $26.4 billion, relative to more than $3Of the total reserves of $1 trillion, it accounts for less than 1%.
Therefore, it can be said that the reduction of foreign exchange reserves has a limited impact on the overall stability of the Chinese economy.
Our foreign exchange reserves have been passively reduced, but at the same time, we have actively sold US Treasuries.
1 In August, we sold more than 7% of U.S. bonds, totaling $61.7 billion, more than the reduction in foreign exchange reserves.
It can be seen that our ** strength is very large. However, for the current US debt of more than 33 trillion yuan, the proportion is also very small.
However, don't underestimate this small ratio, which still has a great impact on the United States, and has a role to emulate for other countries, especially causing other countries to consider the value of US debt.
U.S. bonds have always been regarded as a long-term investment option by countries, and for the U.S. Treasury, countries holding U.S. bonds are one of the most stable investors.
In recent years, countries have frequently sold off U.S. bonds, resulting in the continuation of U.S. bonds.
While some institutions may take advantage of the rise in Treasury yields for short-term investments, these funds are often only in pursuit, and they will be quickly withdrawn regardless of profit or loss, which is not in line with the expectations of the US Treasury.
In fact, more and more countries around the world are also selling US bonds, which reflects doubts about the hegemony of the US dollar and concerns about US bonds.
Today, the sell-off in U.S. bonds has made it difficult to issue U.S. bonds. In the past, a large number of bonds issued by the United States** have been able to find buyers quickly, and one of the important reasons is that the global demand for the US dollar is very high.
As countries reduce their use of the U.S. dollar, especially in settlements, seeking alternative currencies, U.S. bonds have become much less attractive.
This makes it more difficult for the United States** to issue bonds, and more must be done to attract investors, such as raising interest rates or increasing bond repurchase programs.
Moreover, the sell-off in U.S. bonds has led to a constant increase in U.S. bonds. A large number of sell-offs meant a surplus and a drop in demand, which sent a shock to the U.S. Treasury market.
With the increase in the scale of sell-offs, the ** continued ** of US bonds, so that the countries and institutions holding US bonds face losses. This further highlights the instability of the world's largest bond market.
More importantly, the sell-off in US bonds reflects a shift in the global monetary system. The U.S. dollar has always been the main currency for settlement among international currencies.
However, in the current global economic landscape, countries around the world are promoting local currencies or using non-US currencies for ** settlement.
This trend is reflected not only in the sell-off in US bonds, but also in the gradual use of other currencies such as the yuan and the euro in oil settlements by Middle Eastern oil producers.
From this point of view, who will have the last laugh?