|
|
China's forex reserve tops 1.33 trillion USD (2) |
 |
+ |
- |
21:55, July 11, 2007 |
China''s forex reserve came to 609.9 billion U.S. dollars by 2004, 818.9 billion U.S. dollars by 2005 and 853.6 billion U.S. dollars by the end of last February, making the country overtake Japan to become the biggest foreign reserve holder of the world.
The forex reserve exceeded 1 trillion U.S. dollars at the end of October, 2006 and 1.2 trillion U.S. dollars at the end of the first quarter of 2007.
"A large-scale forex reserve may backfire," said Wang. "It is the major reason leading to the excess liquidity in China."
The central bank has to spend quantities of basic money to purchase foreign exchange, thus aggravating the problem of surplus fluidity.
By the end of June, the M2 -- a broad measure of money supply -- grew by 17.06 percent from a year ago, 0.21 percentage point more slowly than the end of March, but still higher than the target growth of 16 percent set by the central bank at the beginning of this year.
On the other hand, continuous growth of forex reserve has in fact increased the pressure on appreciation of the Chinese currency, which in turn has exerted greater pressure on value preservation of China''s forex reserve.
The central parity rate of the RMB hit a new high on Wednesday, standing at 7.5712 yuan to one U.S. dollar, after reaching 7.5845 yuan to one U.S. dollar on Tuesday.
[1] [2] [3]
|
|
|
Comment
Tell A Friend
Print Format
Save Article