China’s foreign-exchange reserves topped US$2 trillion for the first time, strengthening the nation’s finances as the government boosts spending and cuts interest rates to counter the financial crisis.
National Bureau of Statistics chief economist Yao Jingyuan (姚景源) cited the increase at a forum in Beijing yesterday, without giving an exact number. 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.
China reported a record US$35.2 billion trade surplus last month. The reserves have increased 14 times in size in the past decade, government data showed. They topped US$1 trillion in 2006.
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 current crisis, statistics bureau spokesman Li Xiaochao (李曉超) wrote in a report published yesterday on the finance ministry’s Web site.
China is grappling with how best to manage the reserves, forecast by the IMF to reach US$2.2 trillion by the end of the year and US$2.7 trillion by the end of next year. Diversifying away from US Treasury bills has brought losses.
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