Contact Us Links 中文
HOME > Major Events
China forex reserves exceed 1.9 trillion U.S. dollars
2008-10-14 23:08

BEIJING, Oct. 14 (Xinhua) -- China's central bank reported on Tuesday the country's foreign exchange reserves surged to 1.9056 trillion U.S. dollars through September.

The figure was up 32.92 percent from the same period last year, the People's Bank of China said in a report published on its website.

The forex reserves have been growing rapidly in recent years with the ballooning trade surplus. The country overtook Japan to become the world's largest holder of forex reserves in February 2006.

The growth of the reserves, however, had been slowing since the beginning of this year, accompanied with a shrinking trade surplus. The latest growth further eased from a 35.73 percent riseby through June and 47.7 percent in 2007.

The forex figure also came as the General Administration of Customs said on Monday the country's trade surplus narrowed 2.6 percent year-on-year to 180.9 billion U.S. dollars in the first three quarters.

The central bank said 377.3 billion U.S. dollars were added to the forex reserves in the first three quarters.

In September, the reserve build-up expanded by 21.4 billion U.S. dollars, compared with rises of 36 billion U.S. dollars and 39 billion U.S. dollars in July and August, respectively.

The monthly increase was averaged at 41.9 billion U.S. dollars in the first nine months, still higher than an average 38.5 billion U.S. dollars recorded last year.

The average monthly increase for the third quarter alone was 32billion U.S. dollars, and higher than market expectations.

Analysts said the rapid growth in the third quarter was a result of growing exports and expanding trade surplus despite weakened global demand.

Official figures showed the country's trade surplus had been expanding by more than 27 billion U.S. dollars each month in the third quarter, which also overran market expectations.

Tan Yaling, a China International Economic Relations Society economist, said the growth in forex reserves also indicated a growing interest in yuan assets as a haven for investment amid theglobal turmoil.

"Under the current financial crisis that originated in the United States and with the euro also softening, China's yuan-denominated assets appear relatively safer and created an influx of foreign investment, which also contributed to the growth in the third quarter."

Zhang Bin, a Chinese Academy of Social Sciences researcher, said the U.S. financial crisis had a limited impact on the country's huge forex reserves, as the forex supervisor had diversified the holdings so as to avert some risks.

Through September, the M2 -- a broad measure of money supply, which covers cash in circulation plus all deposits -- grew by 15.29 percent from a year ago to 45.29 trillion yuan (6.7 trillionU.S. dollars).

The M2 growth was 0.71 percentage points lower than the previous month. The figure had fallen for the fourth consecutive month as the government's tightening measures started to take hold.

Tightening policies, including several interest rate hikes, since the end of last year, adopted to fight soaring inflation and overheating risks, however, had recently been replaced by two rate cuts in less than a month.

Such moves were taken to boost the domestic economy amid worries over the deepening global financial crisis.

Through September, the narrow measure of money supply, M1, was up 9.43 percent to 15.57 trillion yuan, again lower than the 11.48percent rise in August, according to the central bank.

The central bank report also said the country's financial system remained stable.

Outstanding local currency loans expanded 14.48 percent to 29.65 trillion yuan. The growth was 0.19 percentage points higher than the previous month.

Outstanding loans in foreign currencies, however, rose only 30.86 percent to 269.2 billion U.S. dollars, compared with a gain of 37.84 percent in August.

The report said local-currency deposits were up 18.79 percent to 45.49 trillion yuan, while foreign-currency deposits grew 9.37 percent to 174.2 billion U.S. dollars.

Local-currency transactions on the inter-bank market reached 9.49 trillion yuan last month. Average daily transactions were 451.9 billion yuan, up 17 percent year on year.

Source: Xinhua


[Suggest to a Friend]
     [Print]