Resolved Question
How large is China's foreign exchange reserves?
about 1 year ago
Best Answer - Chosen by Asker
China's foreign exchange reserves, the highest in the world, rose to $2.44 trillion at the end of March.
This is larger than the GDP of Italy, the world's 7th largest economy. China's reserves are growing at about $400 billion per year, roughly adding Norway's economy to their reserve surplus every year.
At the end of 2009, China's foreign exchange reserves totaled $2.39 trillion.
These reserves are generated from structural imbalances in the world economy, with China running huge trade surpluses which are exacerbated by China's currency peg. To keep the currency within a narrow range, China is forced to buy foreign currency that comes into the country. The Yuan it spends to buy foreign cash is added to the funds sloshing around China's banking system. In addition, the foreign currency that the Bank of China holds is then reinvested, mostly in low yielding investments like US Treasury Bonds. In fact, China is the largest holder of US Treasuries.
about 1 year ago
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Answers (1)
The largest in the world! It amounts to 2.44 trillion USD as of March this year.
about 1 year ago
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