China's foreign currency reserves decline

[Pioneerfirst]

China's official foreign currency reserves fell in the last three months of 2011, marking their first quarterly decline since 1998.

Figures from the People's Bank of China showed its reserves had slipped 0.6% to $3.18tn (£2.07tn).

Beijing's stock of foreign currencies is still by far the biggest in the world.

The reserves reflect China's trade surplus as well as investments in China by foreign companies.

Analysts say the fall in reserves may be a sign of speculators moving their money out of the Chinese currency because they expect it to fall against the US dollar.

It also reflects China's narrowing trade surplus, caused by falling demand for Chinese goods among overseas customers hit by the financial crisis.

China's trade surplus narrowed for a third consecutive year in 2011, falling to about $160bn compared with its record high of $295bn in 2008.

The Shanghai Composite Index closed down 1.3% on Friday, accelerating its losses after the reserve figures were released.

BBC News - China's foreign currency reserves decline

---------- Post added at 12:04 AM ---------- Previous post was at 12:03 AM ----------

even after drop Chinese reserves are more than the GDP of whole south Asia,
and almost 15 times to the Pakistan's GDP,

 

[Chinese-Dragon]

even after drop Chinese reserves are more than the GDP of whole south Asia,

One of the great advantages of being a trade surplus nation, we get to build up nice currency reserves.

So in case anything goes bad with debts etc. they can simply be absorbed by the Government.

The drop in our currency reserves, reflects a "rebalancing" of our economy, away from excessive investment/exports and into a more consumption-based economy.

 

[SinoChallenger]

Our currency reserves will fall to 0 just before the US goes hyper.