China’s forex reserves reach a record high
CHINA has added to its vast vault of foreign exchange reserves, as the value of its yen and euro assets was buoyed by the weakness of the dollar and foreign companies saw the Communist state as an increasingly attractive investment prospect.
The People’s Bank of China said its holdings of foreign currency rose by $141bn (£88.3bn) in the third quarter to an all-time high of $2.27 trillion, although the rise was less than the $178bn in the second quarter.
China’s foreign exchange reserves have been steadily expanding in recent years and have begun to swell even faster as the central bank buys up dollars generated by a huge trade surplus of $12.9bn, in order to hold back the Chinese yuan.
Trade figures released yesterday showed that China’s economic recovery was moving faster than expected, with exports down 15.2 per cent in September, beating forecasts of a 21 per cent fall. Imports fell just 3.5 per cent, well below expectations of a 15.3 per cent decline.
“Overall, export performance will be much better in the months to come. I think it’s going to be sustainable and it’s going to accelerate,” said Dong Tao, chief China economist for Credit Suisse in Hong Kong.