Core Viewpoint - As of October 2025, China's foreign exchange reserves reached $3.3433 trillion, marking a $4.7 billion increase from September, the highest level since December 2015, with reserves remaining above $3.3 trillion for three consecutive months [1] Group 1: Foreign Exchange Reserves - The increase in foreign exchange reserves in October was influenced by major economies' monetary policies, macroeconomic data, and a rising dollar index, which led to an overall increase in global financial asset prices [1] - The dollar index rose approximately 1.95% in the past month, while the euro, yen, and pound depreciated against the dollar by 1.7%, 4%, and 2.2% respectively [1] - Despite the Federal Reserve's interest rate cut in October, the dollar index strengthened due to market expectations cooling on further rate cuts, alongside improved China-U.S. trade relations and increased geopolitical uncertainty [1] Group 2: Asset Prices and Economic Outlook - Global stock and bond markets strengthened in October, supporting China's foreign exchange reserves, with the 10-year U.S. Treasury yield declining by about 5 basis points due to the Fed's rate cut and government shutdown concerns [2] - The outlook for China's foreign exchange reserves remains stable, supported by the country's strong economic fundamentals and potential for growth [2] Group 3: Gold Reserves - As of October, China's official gold reserves increased to 7.409 million ounces, a rise of 30,000 ounces, marking the lowest increase since November 2024 [2] - The People's Bank of China has been gradually increasing gold reserves since March, with monthly increments below 100,000 ounces, signaling a strategy to optimize international reserves [2] - The gold market has experienced volatility, with prices briefly exceeding $4,300 per ounce before a rapid correction, indicating potential slowing in central bank purchases due to reaching target levels [3]

Core Insights - As of the end of September 2025, China's foreign exchange reserves reached 3,338.7 billion USD, an increase of 16.5 billion USD from the end of August, representing a growth rate of 0.5% [1] Group 1: Foreign Exchange Reserves - The increase in foreign exchange reserves is primarily driven by the rise in global financial asset prices [1] - The U.S. Federal Reserve's decision to restart interest rate cuts has contributed to a general rise in major global stock indices and a decline in U.S. Treasury yields, which in turn has boosted the valuation of China's foreign reserve investments [1] Group 2: Dollar Index and Asset Valuation - Despite the increase in reserves, the U.S. dollar index only fell by 0.03% compared to the end of August, indicating that the impact of previous significant dollar depreciation on the valuation of non-dollar assets in China's reserves has diminished in September [1] - This reduction in the impact of dollar depreciation is a key reason for the narrowing of the increase in foreign reserves compared to the previous month [1]