People Bank of China - Photo: Special

JAKARTA (TheInsiderStories) – China’s foreign exchange reserves were recorded at US$3.09 trillion in September 2019, decrease by $14.8 billion from the previous month at $3.1 trillion,” said the regulator in an official statement on Monday (10/07).

According to the regulator, the decline was caused by efforts to stabilize the yuan exchange rate. Until now, China has burned its foreign exchange reserves of $1trillion to increase the value of the Yuan.

Thus, in September, the value of the yuan against the dollar rose by 0.14 percent after posting the largest monthly decline within 25 years in August, Reuters reported. Yet the dollar exchange climbed by 0.47 percent in September against other major currencies.

Looking ahead, the regulator saw uncertainties in the global economy and financial markets will increase. China also has to face the risk of economic growth which will slip 6 percent in the third quarter or during the following year, and this figure is below Beijing’s final target for 2019, because of the trade war with the United States (US) continues.

Meanwhile, Chinese government officials had signaled that Beijing does not agree to a comprehensive trade agreement as desired by US President Donald Trump, Bloomberg reported. Chinese Deputy Prime Minister Liu He also informed that China did not change the practice of providing subsidies to China companies in a trade agreement proposal submitted to Washington.

On the other hand, the US really wants to change the practice of giving subsidies to companies from China. In fact, this is one of the factors that lead to the trade war between the two countries. With China’s stance, the US-China tension is sure to increase.

The latest, the US put eight giant technology companies from China on the blacklist, making the eight companies can not do business with US companies without a special license. The US said that the eight companies are involved in human rights violations against Muslims in Xinjiang, China.

The decision marks the first time the US has used human rights reasons to pressure China. Previously, Huawei as a telecommunications giant from China was also blacklisted by the US, but for reasons of national security.

Besides China, Indonesia also posted a decreasing in foreign exchange reserves. Bank Indonesia noted the foreign exchange reserves amounted to $124.3 billion at the end of September, lower 1.66 percent than the position at the end of August, worth of $126.4 billion.

The forex reserves declining was influenced by the need of the government to refinance foreign debt and reduced placement of foreign exchange at the bank.

It said the position of forex reserves is equivalent to financing 7.2 months of imports or 7 months of imports and payment of government foreign debt. This foreign exchange reserve is also above the international adequacy standard around 3 months of import.

Written by Staff Editor, Email: theinsiderstories@gmail.com