China’s foreign exchange reserves rise to a record $2.13 trillion
15 Jul 2009
China, the world's third-largest economy, saw its foreign exchange reserves rise by 17.8 per cent year-on-year to a record $2.13 trillion at the end of June, according to figures released by the People's Bank of China yesterday.
The reserves rose by a record $185.6 billion in the first six months of this year on the back of overseas investors investing in property and stocks, as the country's economy showed signs of recovery after the Chinese government pumped in a massive $586 billion to bolster its economy in November 2008. (See: China pumps $586 billion to bolster economy)
The nation's forex reserves, stood at $1.946 trillion at the end of 2008. Though the reserves rose by $185.6 billion in the first six months, it was $95 billion, short of the total figure reported a year ago.
The forex reserves rose by by $55.14 billion in April, $80.61 billion in May and $42.12 billion in June, according to the central-bank figures.
China's reserves have risen due to its huge trade surplus and the return of investors, who had briefly moved money out of China in the last quarter of 2008. Although its exports have plunged, the central bank has kept on buying dollars generated by its huge trade surplus in exchange for Chinese yuan.
According to analysts, nearly 65 per cent of China's huge forex reserves are in dollar assets, while the rest are held mainly in yen, euros and sterling.
