China’s Foreign Exchange Reserves Increase to $3.32 Trillion in August
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China’s foreign exchange reserves reached $3.3222 trillion at the end of August 2025, marking an increase of $29.9 billion or 0.91% compared to the end of July, according to official data released on Sunday. But why did reserve increase so much? Let’s know about it.
Why Did the Reserves Increase?
The State Administration of Foreign Exchange (SAFE) explained that the rise in reserves was mainly due to two factors:
- Currency translation effects – The value of reserves changes when global currencies fluctuate against the US dollar.
- Changes in asset prices – A rise in the value of global financial assets also contributed to the growth.
In August, the US dollar index weakened because of shifting expectations around the monetary policies of major economies and new macroeconomic data. At the same time, global asset prices generally increased, which supported China’s reserve growth.
SAFE highlighted that China’s economy is continuing to show steady growth, resilience, and vitality. This stability gives strong backing to the country’s foreign exchange reserves, ensuring they remain secure and reliable despite global market fluctuations.
India’s Foreign Exchange Reserves
India’s foreign exchange reserves increased by $3.51 billion, reaching $694.23 billion for the week ended August 29, as reported by the Reserve Bank of India (RBI). According to the RBI data, India’s reserve position with the IMF also improved by $18 million, reaching $4.749 billion.
India’s central bank (RBI) has shown a preference for increasing gold reserves instead of US Treasury bills to strengthen its foreign exchange holdings, according to recent data from the US Department of Treasury and RBI. The quantity of gold within foreign exchange reserves reached 879.98 metric tonnes as of June 27, 2025, rising from 840.76 metric tonnes recorded on June 28, 2024.
