Valuation Effects - As of the end of May, China's foreign exchange reserves reached $3,285.255 billion, an increase of $3.59 billion month-on-month[6] - The valuation effect from rising bond yields in major economies is expected to negatively impact foreign reserves, estimated to decrease by around $20 billion[6] - The overall valuation and interest effects are estimated to reduce foreign exchange reserves by approximately $19 billion[6] Trading Factors - Excluding foreign capital flows, the net settlement and other currency demand are expected to contribute to an increase in foreign reserves of about $13 billion[7] - The trading factors are projected to lead to an increase in foreign reserves of approximately $23 billion[7] - The anticipated inflow of foreign capital into RMB assets is estimated to be around $10 billion due to improved market sentiment and easing trade tensions[7] Currency Outlook - The RMB exchange rate is expected to stabilize within the range of 7.1 to 7.2 as the impact of trade tensions dissipates[8] - The dollar index decreased by 0.2% from the end of April, contributing to a more favorable exchange rate environment for the RMB[6] Monetary Policy - The central bank's monetary policy is expected to maintain a supportive stance, with potential for further easing in the second half of the year[9] - Structural monetary policy tools are likely to focus on enhancing existing measures to support consumption and trade[9] Risk Factors - Risks include potential unexpected changes in the Federal Reserve's monetary policy and geopolitical developments affecting exchange rates[9]