China’s FX Reserves Dip in June

China’s foreign exchange reserves fell to $3.416 trillion at the end of June 2026, down from an over ten-year high of $3.442 trillion touched in May and below market expectations of $3.44 trillion. The decline followed a 2.3% rise in the US dollar against a basket of currencies, its strongest monthly gain since July 2025, amid expectations of a Federal Reserve rate hike this year. China’s central bank continued its gold-buying streak for a 20th month, with reserves reaching 75.44 million fine troy ounces by June’s end, up from 74.96 million in May. However, the value of these reserves dropped to $303.72 billion from $340.75 billion.

China’s foreign exchange reserves climbed by USD 31.7 billion to USD 3.442 trillion in May 2026, marking a 0.93% rise from USD 3.411 trillion in April and reaching their highest level since October 2015. The increase came as the greenback regained broader momentum. The yuan rose 0.95% against the U.S. dollar last month, while the dollar strengthened 0.85% against a basket of major currencies. Meanwhile, the People’s Bank of China continued to add to its gold holdings for the 19th consecutive month, with reserves rising slightly to 74.96 million fine troy ounces in May from 74.64 million in April. However, the value of these holdings declined slightly to USD 340.07 billion, down from USD 344.17 billion a month earlier.

Foreign exchange reserves held and published by the People's Bank of China fell by $85.7 billion from the previous month to an equivalent of $3.342 trillion in March of 2026, the sharpest decline in ten years. The pullback was aligned with the surge in the dollar during the period as the outbreak of war in the Middle East at the start of the month drove global markets to pivot toward the greenback, pressuring the dollar-valuation of Treasury securities, gold, and other foreign exchange assets. Bullion held by the PBoC fell to an equivalent of $343 billion, even though the central bank took more tonnage in the period. National stockpiles rose by 160 thousand troy ounces in the period, the most in over one year.