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China's forex reserves up to US$818.9b
(Reuters/Xinhua)
Updated: 2006-01-15 16:59
China's foreign exchange reserves jumped US$49.9 billion in the fourth
quarter of 2005 to a record US$818.9 billion, a leap that could intensify
pressure on Beijing to let the yuan rise more quickly, the Reuters reported
Sunday.
The central bank said on Sunday that its reserves swelled $209 billion, or
34.3 percent, in the whole of 2005 following an increase of $207 billion in
2004.
China's foreign exchange reserves has hit
US$818.9 billion, the People's Bank of China said.
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Only Japan, with $846.9 billion, has a larger stockpile.
China's reserves have ballooned in recent years as the central bank has
bought most of the dollars generated by a growing trade surplus, inflows of
foreign direct investment and speculative capital.
Coming after statistical revisions last month showing the economy was 16.8
percent bigger than previously reported, Rob Subbaraman of Lehman Brothers in
Tokyo said the data would hand fresh ammunition to U.S. critics clamouring for a
stronger yuan.
"You have an economy that has just turned out to be bigger than everyone
thought. It's growing around 10 percent, and you have reserves growing to new
record highs every month. That's providing a lot of arguments for China to move
a bit quicker on the currency front," Subbaraman said.
Beijing has vowed to gradually let market forces drive the yuan's exchange
rate.
Since China revalued the yuan by 2.1 percent against the dollar in July and
adopted a managed float, it has let the currency rise a further 0.52
percent against the dollar.
Gao Shanwen, chief economist at Everbright Securities in Shanghai expects
China's reserves to grow another $200 billion this year as the trade surplus
continues to rise.
"The pace of build-up of forex reserves in 2006 will continue to be strong,"
he said. "That means upward pressure on the yuan remains as it was before. It
faces persistent upward pressure."
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