August 8, 2019

Andrew Campbell 

According to an article published by the World Gold Council, the people's Bank of China has continued to expand the gold reserves for eight consecutive months since December 2018. It is because the Chinese central bank wants to prevent quick drop in the currency and show the Yuan’s influence and stability, pointed by Brad Setser, senior fellow for international economics at the Council on Foreign Relations.  

In August, the World Gold Council released that central banks usually make their gold reserves at a normal rate except China. Under the pressure of global trade frictions, China has to exert whatever it can do to keep the value of the currency.

Tan Yaling, director of the China Institute of Foreign Investment, said that increasing the holding of gold reserves can make the overseas export  more extensive and less risky. As far as developed countries are concerned, the proportion of foreign gold stocks is basically more than 40 percent, while that of China and some developing countries accounts for less than 10 percent. 

Photo:Webshot.