Reserves Stable Despite Yuan Pressure
China's foreign exchange reserves stood at $3.4188 trillion at the end of July 2026, the People's Bank of China reported on August 8, up a modest $250 million from the prior month. Gold reserves extended their consecutive monthly accumulation to 21 months, reaching 76.08 million ounces — an increase of 640,000 ounces over the streak.
The Gold Accumulation Story
The PBOC has added gold reserves for 21 straight months as part of a strategic diversification away from dollar assets. Geopolitical tensions, the risk of secondary US financial sanctions and the долгосрочная趋势 of reserve diversification have made gold increasingly attractive. China's gold reserves now represent approximately 5.1% of total reserves, up from around 3.5% two years ago.
Reserve Adequacy and the Yuan
With reserves at approximately 11 months of import cover, China retains ample buffer for currency intervention. The yuan traded at the PBOC's August 10 midpoint of 6.7889 per dollar, with onshore and offshore rates near 6.7495 and 6.7482 respectively — reflecting gradual depreciation consistent with the PBOC's moderately loose monetary stance.
The modest FX reserve increase despite yuan weakness signals that the central bank is managing depreciation selectively rather than defending a specific level aggressively. This balanced approach preserves reserves while allowing the currency to function as a shock absorber amid global uncertainty.