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By the end of April 2022, everyone's international reserve account balance was $319.97 billion, a decrease of $130.4 billion in four months. When you see the decrease in data, some people worry whether the decrease in international reserves reflects a lack of confidence in our imports and exports, right? In fact, the real factor 美元is more related to the strength of the dollar, we use simple and clear language expressions to organize this issue.
1, first of all, we have to figure out the composition of international reserves there are two: (1) investors immediately out of money in everyone. In the case of the first quarter, there was a net inflow of $65 billion of foreign direct investment funds, so there is nothing wrong with that; (2) surplus. In the same quarter, everyone had a current account trade surplus of $89.5 billion, so there was no problem either.
2, then why international reserves decreased by more than 130 billion yuan? The key factor is that the US dollar is raising interest rates. Some people ask, why the dollar interest rate increase makes our international reserves lower?
(1) When the dollar raises interest rates, it makes the dollar stronger, and the appreciation of the dollar means that all credit currencies are falling against the dollar! Well, after we figure out this connection, let's look at the asset structure of international reserves. We international reserve capital, in addition to the U.S. dollar property, but also the property of other economic powers credit currency, such as Europe, the dollar, the yen these. In April, the euro fell by 4.7%, the dollar fell by 4.35%, and the yen fell by 6.2%, so this kind of credit currency is also a drop in value in relation to the dollar, so it is natural to have their credit currency property converted into U.S. dollar property, which is a shrinkage of property.
(2) The capital of international reserves is more than three trillion dollars, but in this asset structure, there are more properties in US dollars, about one trillion. Some people say that even if we have dollar property, the old U.S. interest rate rises and the dollar strengthens, then we should also increase the value of our reserves. There is nothing wrong with that, theoretically, but people's dollar assets are dominated by U.S. government bonds, and a stronger dollar is exactly the opposite of U.S. government bonds! Why? It is because when the US interest rate rises, the US bond yields will rise, right? But has been offered for sale on the national bond, its ticket interest rate is determined, so the assets will be biased towards the inflow of sales market savings interest rate (because it is on sale), then caused investors have the old treasury bond interest rate is not high bond yields, they will choose to sell treasury bonds, then everyone sells treasury bonds, you need to sell successfully, make sure to pay a lower price than others, so the old treasury bonds, its The price will fall.
Well, after understanding this basic principle, you can understand that everyone owns more than one trillion U.S. treasury bonds, and his price has fallen, causing people's ownership accounts to have a lower value for immediate use, which also produces a shrinkage of the overall international reserves.
It is a good idea to adjust a certain percentage of your foreign exchange structure to help you resist this risk.
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