Sunday, 27 November 2011

China's Foreign Exchange Reserves

Due to strong exports and foreign investment into China, China has been piling up an enormous amount of foreign exchange reserves (currency, gold and special drawing rights with the IMF). Approximately 2/3 of these reserves are in US dollar assets (US treasury bills, US treasury bonds). A linear regression model indicates that China is accumulating an average of $33 billion per month.At the end of September 2011, China held $3.2 trillion in foreign exchange reserves.

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