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BIZCHINA / Developments |
Foreign exchange reserves swell to US$1.43 trillionBy Xin Zhiming (China Daily)
Updated: 2007-10-13 09:23 The country's foreign exchange reserves expanded to US$1.43 trillion at the end of September, a year-on-year increase of 45.1 percent, the central bank said on Friday. That's 3.5 percentage points higher than in the first six months. "The increasing trade surplus has been the main driver of the reserve expansion," said Hu Shaowei, a senior economist with the State Information Center. China's trade surplus was US$185.7 billion in the first nine months - more than for the whole of last year - according to Customs. It may also be a result of incoming "hot money" as the domestic stock and property markets surge, said Chen Xingdong, chief economist of BNP Paribas Peregrine Securities in Beijing. Some analysts said the reserves could have been higher if not for the transfer of funds to the newly launched China Investment Corp, but the central bank did not reveal whether this is the case. Hu said the expanding trade surplus is difficult to control and contributes to the country's ballooning reserves. The Chinese Academy of Social Sciences' latest macroeconomic forecast said the surplus could reach a record high of about US$260 billion this year. Meanwhile, the central bank said, the annual growth in broad money supply or M2 accelerated to 18.45 percent in September, up by 1.39 percentage points from the end of June. Yuan-denominated lending rose to 25.9 trillion yuan (US$3.44 trillion) at the end of September, a year-on-year increase of 17.13 percent. Banks extended 3.36 trillion yuan in new loans in the first nine months of the year, 607.3 billion more than last year, which, analysts said, could add pressure to fixed-assets investment. The central bank said in a statement that the financial situation was, on the whole, "stable". |
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