On September 7th, the State Administration of Foreign Exchange (hereinafter referred to as the "SAFE") released data on the scale of foreign exchange reserves as of the end of August 2025. Data shows that as of the end of August 2025, China's foreign exchange reserves amounted to 3322.2 billion US dollars, an increase of 29.9 billion US dollars or 0.91% from the end of July. The State Administration of Foreign Exchange stated that in August 2025, due to factors such as expected monetary policies of major economies and macroeconomic data, the US dollar index fell and global financial asset prices rose overall. The combined effect of exchange rate conversion and asset price changes led to an increase in the scale of foreign exchange reserves for the month. According to Guan Tao, Global Chief Economist of Bank of China Securities, as of the end of August, China's foreign exchange reserve balance has once again hit a new high since 2016, indicating that China's ability to prevent and resolve various shocks continues to improve. From the perspective of exchange rates, Wind Information data shows that the US dollar index fell 2.21% in August. Non US currencies have generally appreciated, with the Japanese yen, euro, and pound rising by 2.46%, 2.37%, and 2.25% respectively against the US dollar. Due to the fact that foreign reserves are denominated in US dollars, the appreciation of non US currencies has increased the scale of foreign exchange reserves converted by exchange rates. In terms of asset prices, in August, the 10-year US Treasury yield fell by 14 basis points to 4.23% due to expectations of a Fed rate cut. The US dollar denominated hedged global bond index rose by 0.5%, and the US S&P 500 index rose by 1.9%. The weakening of the US dollar has released liquidity to the world, and most non US stock markets have maintained high prosperity. The high global asset prices have supported foreign exchange reserves. The State Administration of Foreign Exchange stated that China's economy has made steady progress, demonstrating strong resilience and vitality, providing support for maintaining basic stability in the scale of foreign exchange reserves. Despite an increase in external instability and uncertainty, China's economy still has a solid foundation, prominent advantages, and enormous potential. ”Wen Bin, Chief Economist of Minsheng Bank, believes that China has abundant macroeconomic control tools and ample policy space, which provide strong support for fully tapping into the potential of domestic demand. At the same time, the increasingly diversified regional layout of foreign trade, the continuous optimization of trade structure, and the increasing attractiveness of RMB assets to international capital all contribute to maintaining a basic balance of international payments and a stable scale of foreign exchange reserves in China. In addition, the updated gold reserve data on September 7th showed that as of the end of August, China's gold reserves were 74.02 million ounces (253.843 billion US dollars), an increase of 60000 ounces from the end of July. The People's Bank of China has increased its holdings of gold for the 10th consecutive month. Guan Tao believes that against the backdrop of a significantly increasing complexity of the external environment, the diversification process of China's international reserve assets continues to steadily advance. As of the end of August, the proportion of China's gold reserves to its foreign exchange reserves during the same period increased by 0.23 percentage points month on month to 7.64%, setting a new historical high. Affected by various factors, the trend of multipolarity in the international reserve system is accelerating. ”Guan Tao stated that currently, gold has surpassed the euro to become the second largest international reserve asset after the US dollar. (New Society)