China’s foreign exchange reserves recorded a modest decline in September 2026, reflecting the impact of global financial market fluctuations and changes in international monetary policy. Despite the decrease, analysts believe the country’s stable economic fundamentals and resilient export performance continue to provide solid support for maintaining overall stability in its foreign exchange reserves.
According to data released by the State Administration of Foreign Exchange (SAFE), China’s foreign exchange reserves stood at US$3.4003 trillion at the end of September, down US$38.1 billion, or 1.11%, compared with the end of August.
SAFE attributed the decline primarily to developments in global financial markets during September. The U.S. dollar index strengthened, while prices of major global financial assets generally declined amid evolving macroeconomic conditions and adjustments in monetary policies by major economies. The combined impact of exchange-rate movements and changes in asset valuations led to a temporary reduction in the value of China’s foreign exchange reserves.
Market expectations surrounding U.S. monetary policy also influenced global capital markets. During September, the U.S. Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4%, marking its first rate increase of the year. Updated policy projections and comments from Federal Reserve officials signaled the possibility of another rate hike before year-end, strengthening expectations of tighter monetary policy.
Higher interest rate expectations contributed to rising yields on U.S. Treasury bonds and other global government debt, while also supporting a stronger U.S. dollar. These market movements placed valuation pressure on foreign exchange reserve assets held by many countries, including China.
Although reserves declined during the month, SAFE emphasized that China’s economy continues to demonstrate stable performance. The country’s ongoing economic restructuring, development of new growth drivers and continued progress toward high-quality development provide a solid foundation for keeping foreign exchange reserves broadly stable over the long term.
Analysts also noted that China’s export sector remains an important source of support for the country’s balance of payments. Continued resilience in exports is expected to help maintain stability in cross-border capital flows and foreign exchange reserves despite external uncertainties.
In addition to its foreign exchange reserves, China continued to expand its official gold holdings. By the end of September, the country’s gold reserves reached 77.47 million ounces, an increase of 740,000 ounces from the previous month.
The latest increase marked the 23rd consecutive month that the People’s Bank of China has added to its gold reserves, highlighting the country’s continued efforts to diversify its reserve assets amid an evolving global financial environment.
Overall, while China’s foreign exchange reserves experienced a modest month-on-month decline due to external market factors, the country’s economic fundamentals, export performance and continued accumulation of gold reserves suggest that its overall reserve position remains stable.
