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Forex reserves growth rate easing
www.chinanews.cn 2005-10-17 13:55:11
Chinanews, Oct. 17 - According to reports from the National Business
Daily, China's forex reserves have grown at a lower rate in September. On
October 14, the Central Bank of China's 3rd quarter 2005 financial
statistics show that in September, the nation's forex reserves increased
by US$15.8 billion, the smallest increase since January this year.
Compared to the same period last year, this year's September increase in
forex reserves was US$2.6 billion smaller. Up to the end of September,
China's total forex reserves were US$769 billion, rising 49.5% year on
year. In the first three quarters of this year, China's reserves
increased US$159.1 billion, US$47.8 billion more than the same period
last year.
Standard Chartered Bank senior global research analyst Stephen Green
pointed out in his report on the 14th that there is another reason for
the slower growth in forex reserves in September and means that the trend
of "hot money" flowing into China may still be accelerating.
Green explained that during September both the Yen and Euro depreciated
by about 5% versus the U.S. dollar and since about 30% of China's forex
reserves consist of the two non-dollar currencies, that means out of
China's total reserves of US$753 billion, about US$226 billion are held
in Euro and Yen assets, according to statistics from the State
Administration of Foreign Exchange's August figures. After the Euro and
Yen depreciated in September, China's forex reserves lost about US$11
billion in value. Up through September, the total forex reserves are
US$769 billion, meaning that a net inflow of US$27 billion took place
during the month, much larger than the comparable US$15.8 billion figure
for August.
Green said that considering the factor of Yen and Euro depreciating, the
inflow of foreign exchange into China is still growing at last year's
rate of 50% or more.
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