China's foreign exchange reserves in the first drop in five years
China State Administration of Foreign Exchange Management Department of external debt capital Cai Qiusheng Department recently said that China's foreign exchange reserves since December 2003 for the first time since the decline has been lower than 1,900,000,000,000 U.S. dollars. The sources disclosed yesterday that China's foreign exchange reserves at the end of 10 has dropped to below 1,890,000,000,000 U.S. dollars for 2003 declined for the first time since the end of the year. The central bank data show that China's foreign exchange reserves at the end of 9 for the balance of 1,905,600,000,000 U.S. dollars, means that in October may reduce 16,000,000,000 U.S. dollars. These sources added that the decline in foreign exchange reserves, in part reflecting the dollar's strength over the past few months, the yuan against the U.S. dollar is weak. He said the government no longer require the company to sell U.S. dollars, as long as the dollar continued to rise, the rapid appreciation of the yuan is expected to weaken, many companies tend to hold U.S. dollars. Over the past few years China's rapid accumulation of foreign reserves, because the central bank to maintain the stability of the RMB exchange rate, a large number of buying through a huge trade surplus and foreign investment influx of dollars. In the third quarter of this year's foreign exchange reserves rose by 32.9 percent, of which foreign exchange reserves in September increased 21,400,000,000 U.S. dollars, up by less 3,600,000,000 U.S. dollars. The quarterly rate of increase is less than the month's trade surplus and foreign direct investment inflows. Increased overseas investment may be one of the reasons Prior to this, some economists expected, with the spread of financial crisis, China may have more capital flight. Caiqiu Sheng pointed out that a moderate slowdown in the growth of foreign exchange reserve management has been looking forward to. "But this also reflects the confidence and a change in the market, we have seen a substantial start of the RMB exchange rate oscillations." Hong Yuan Securities economist room that the world should not be exaggerated interpretation of the decline in foreign exchange reserves. "Because of the financial crisis, foreign investors may be trying to recover the money, I do not think a lot of capital outflows, China's foreign exchange reserves are declining, but the reason may also be more Chinese investment overseas."