China's forex reserves touch $3.2 trillion
12 Jul 2011
China's foreign exchange reserves soared 30.3-per cent year-on-year to hit $3.2 trillion by the end of June, an increase of $157 billion over the past three months.
According to analysts, the reserves, attributed to the large inflows of foreign funds, are likely to further increase pressure on the government and the central bank to tighten monetary policy.
China already holds the highest forex reserves in the world and its large trade surplus is a major irritant in its ties with other countries, notably the United States, which says Beijing's deliberate undervaluation of the yuan gives Chinese exporters an unfair trade advantage, and harming the global recovery.
Under considerable pressure to allow a market-driven exchange rate, China has said on a number of occasions that it would allow more exchange rate flexibility.
The International Monetary Fund had said in April that global recovery "will stand on increasingly hollow legs" unless China makes allowances for a more market-driven exchange rate.
Funds outstanding for foreign exchange in financial institutions increased 277.33 billion yuan ($42.83 billion) over the May to June period to hit 24.67 trillion yuan, the People's Bank of China (PBOC) said in an online statement.
.webp)
