Friday, March 28, 2008

China's forex reserves surge by US$118.9 bln in Jan, Feb

China's foreign exchange reserves soared US$61.6 billion and US$57.3 billion in January and February this year, representing 60% and 9% year-on-year increase respectively, sources reported.

The growth indicated hot money, or illegal speculative capitals, were still coming in China due to its booming economy, sources cited analysts as saying.

However, statistics from the Ministry of Commerce showed the trade surplus in the first two months were US$19.5 billion and US$8.6 billion respectively, much lower than the US$21.8 billion average monthly surplus last year.

Sources also noted the significant increase in foreign-exchange loans in the first two months. According to the central bank, foreign-exchange loans grew by US$17 billion and US$21.4 billion in January and February respectively. Analysts attributed the growth to the speculative profit-taking due to the RMB appreciation.

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