Sat, April 11, 2009
Business > Markets

China foreign exchange reserves at US$1.954 trillion

2009-04-11 09:53:04 GMT2009-04-11 17:53:04 (Beijing Time)

China's central bank said Saturday that its foreign exchange reserves rose 16 percent year-on-year to $1.9537 trillion by the end of March.

China's reserves, already the world's largest, increased by $7.7 billion in the first quarter — $146.2 billion less than the same period last year, the People's Bank of China said in a notice on its Web site.

That rise was substantially less than the fourth quarter increase of almost $45 billion, according to China's official Xinhua News Agency, showing the impact of slowing exports due to the financial crisis.

In March, the reserves increased by $41.7 billion, it said, $6.7 billion more than the same period last year.

Analysts believe China holds up to 70 percent of its foreign reserves in U.S. dollar-denominated assets, including Treasury securities.

China's reserves have ballooned as the central bank buys up dollars generated from its huge trade and influx of foreign investment.

While China's economy has slowed due to a plunge in trade and a slump in the domestic real estate industry, recent data show the drop eased in March.

Beijing has taken steps to hold down the price of exports by cutting taxes on exporters and stopping the rise of China's tightly controlled currency, the yuan, against the U.S. dollar. Economists say both steps could strain relations with trading partners if China is seen to be competing unfairly.

Western leaders including British Prime Minister Gordon Brown are pressing for China to contribute to a global bailout fund from its reserves.

Exports fell 17 percent in March from a year earlier, the fifth straight monthly decline but less severe than February's 25.7 plunge, the sharpest in a decade, the customs agency reported Friday. It said trade "showed clear signs of improvement."

Imports fell by 25.7 percent, widening the Chinese trade surplus to $18.6 billion from February's $4.8 billion gap.


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