China on $ Holdings, 06 CA Surplus

♠ Posted by Emmanuel in , at 5/11/2007 01:52:00 AM
China is keen on reassuring the rest of the world that it is not going to have a $ fire sale. Why it is not retaliating yet against a country that has taken a lot of trade actions against it is beyond me (for now). This news is not new; however, the second bit below is--China's current account surplus was reported to be $249.9B in 2006 according to the State Administration of Foreign Exchange (SAFE):

The central bank said yesterday that the country will not sell large amounts of US dollar-denominated assets to diversify its foreign exchange reserves.

The People's Bank of China also warned of a risk of rising inflation and a rebound in investment as the economy steamed ahead in the first quarter, growing by 11.1 percent year on year.

Authorities have said the country will diversify part of its foreign exchange reserves, which amounted to $1.02 trillion by the end of March and are believed to be invested mainly in dollar bonds.

The central bank said it will mainly address the issue of newly added reserves by widening the foreign currency investment channel and reaffirmed the importance of its US dollar-denominated assets. They will remain an important part of China's outbound investment, the bank said in its monetary policy report for the first quarter, which was published on its website yesterday...

In another development, the State Administration of Foreign Exchange (SAFE) announced yesterday that the country's current account surplus hit $249.9 billion last year, an increase of 55 percent over the 2005 level of $160.8 billion.

The jump came mainly from the increase in the trade of goods, which reached $217.7 billion, up 62 percent year on year, the foreign exchange regulator said on its website.