China Gradually Turned To Asia To Diversify Its Forex Reserve Holdings
China is increasingly looking to Asian neighbours’ currencies and debt markets in a move to reduce its reliance on the
US dollar. It more than doubled its investment in South Korean debt this year, spurring the notes’ longest rally in more
than three years. Korean Treasury bonds held by Chinese investors rose by 111% to US$3.4bn at end-June 2010, from
US$1.6bn at end-2009, according to the Seoul-based Financial Supervisory Service. Despite the sharp jump, China’s
holdings of South Korean notes remained small at a little more than 0.1% of its US$2.45 trn reserves. Similarly, China
has been buying record amounts of Japanese government debt because it is less risky than US debt, at least in the short
term, according to a Chinese government economist. The country bought a net US$20.3bn of Japanese debt in 1H 2010,
compared with a net selloff of US$69m a year earlier and far surpassing its record of US$3.0bn in 2005
The World Economy... - 20/08/2010
No comments:
Post a Comment