China's Reserves To Pass $2 Trillion; China's Reserves Can Stimulate The Economy
Report and analysis by Maithreyi Seetharaman of Bloomberg News
Video courtesy of Bloomberg Video
According to Bloomberg, National Bureau of Statistics chief economist Yao Jingyuan, said China's foreign-exchange reserves will "hopefully" reach US$2 trillion this year.
Trade surpluses helped to swell the reserves, the world's biggest, to US$1.9 trillion at the end of September, according to the central bank. Larger reserves would strengthen the nation's finances as the government boosts spending and cuts interest rates to counter the financial crisis.
Yao quoted the US$2 trillion figure while arguing that China was stronger than when the Asian financial crisis hit in 1997 and 1998.
The reserves, along with high levels of savings by Chinese households, will help the nation to weather the crisis, bureau spokesman Li Xiaochao wrote in a report published yesterday on the finance ministry's Website.
IMF forecast China’s foreign exchange reserve to reach $2.2 trillion by the end of December and $2.7 trillion by the end of 2009. Diversifying away from investing in U.S. Treasury bills has brought losses.
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Sources :
- Bloomberg: China’s Currency Reserves May Rise to $2 Trillion (Update1), November 27, 2008 04:11 EST
- Bloomberg News Video: Video: China's Reserves To Pass $2 Trillion; China's Reserves Can Stimulate The Economy, November 28, 2008 16:54:13
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