Tuesday, January 15, 2008

China Forex Reserves has piled up $1.53 trillion

This has to be the largest reserves anywhere in the universe and there is nothing stopping it from growing. The trade surplus was projected to hit $210 billion by the National Reform & Development Commission a year ago but it had recorded a trade surplus of $260 billion for 2007. It surged nearly 50 percent from last year to surpass $260 billion. The surplus has climbed more than 10-fold since 2003.

US, European and other critics complain that China keeps its currency, the yuan, artificially weak, which they argue gives Chinese exporters an unfair advantage and China has responded by allowing the yuan to appreciate gradually, and slightly faster in recent weeks, but it has refused to scrap its controls completely.

On Monday, the yuan hit a new high against the US dollar smashing the 7.26 mark to reach 7.2566 yuan to one dollar, which marked an appreciation of about 12 percent since the currency’s peg to the greenback was loosened in July 2005. The yuan is likely to appreciate by around eight to 10 percent against the dollar in 2008, according to Qiu Qingdong, a Beijing-based economist with Guodu Securities, whose estimate was similar to those given by other analysts. My advise to you is to keep your money in yuan or RMB instead of US dollars.

Source : AFP

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