China’s Forex reserves fall
Anyone curious about whether China is intentionally allowing the RMB to depreciate, need look no further than the Central Bank’s latest forex reserve figures, which registered a decline for the first time in nearly six years. At the same time, Chinese trade figures indicate that exports fell for the first time in seven years, which limits the government’s ability to build up new reserves. As a result of the credit crisis, it’s conceivable that the Central Bank will continue to spend down its reserves in order to provide a boost to its faltering economy. US President-elect Obama will have to deal with such forces if he wishes to successfully take on China’s currency policy. Otherwise, the RMB currency could appreciate in 2009, bucking its trend over the last few years.
Other sources say:
CHINA’S foreign-exchange reserves have fallen for the first time since December 2003, said Cai Qiusheng, a forex regulatory official.
A transcript of his weekend speech has been posted on a Chinese website, Sina. “The forex reserves have fallen for the first time since December 2003,” Mr Cai said. Mr Cai, who heads the external debt section under the State Administration of Foreign Exchange’s department of capital management, didn’t say when the forex reserves fell or give the latest forex reserves levels. China’s forex reserves totalled $US1.9 trillion ($2.9 trillion) at the end of September, the central bank’s quarterly data show.
Post Details
Posted on January 1, 2009
at 4:45 pm
Written / posted by: Simon
Filed under: Currency Trading