Reserves safe from rising yuan
By Zhang Fengming |
July 21, 2011, Thursday
|
Print Edition
Print Edition
AN appreciating yuan will not eat into China's record US$3.2 trillion foreign exchange reserves, the currency regulator said yesterday.
Meanwhile, the State Administration of Foreign Exchange called on the United States to take strong action to boost investors' confidence in US treasuries.
SAFE is confident that a stronger yuan won't cause losses to the country's massive currency holdings, it said on its website yesterday.
"The changes in the yuan's exchange rate against the US dollar cause changes in the paper value of the reserves when valued in yuan," SAFE said. "This is not a real loss and will not affect the real overseas purchasing power of the foreign-exchange reserves."
The yuan hit a 17-year high yesterday as the People's Bank of China, the central bank, set a record reference rate before the sixth anniversary of the scrapping of a peg to the US dollar.
The central bank set the central parity of the yuan at 6.4592 per US dollar, up 0.14 percent. It's a record high since China de-pegged the yuan from the greenback on July 21, 2005.
Economists have called for the daily trading band, which sits at 0.5 percent now, to be relaxed. The range was last widened to 0.5 percent from 0.3 percent in May 2007.
SAFE also urged the US to be responsible to the investors of US sovereign debts.
"Adding or cutting US treasuries are normal investment options, considering different market conditions," SAFE said. "China has noticed Standard & Poor's and other rating agencies' comments on the US debt issue, and we hope the US government can take responsible actions to enhance global financial markets' confidence and respect and safeguard interests of investors."
SAFE made the comments in a statement titled "Questions and Answers to Hot Issues Concerning Foreign-Exchange Reserves."
Meanwhile, the State Administration of Foreign Exchange called on the United States to take strong action to boost investors' confidence in US treasuries.
SAFE is confident that a stronger yuan won't cause losses to the country's massive currency holdings, it said on its website yesterday.
"The changes in the yuan's exchange rate against the US dollar cause changes in the paper value of the reserves when valued in yuan," SAFE said. "This is not a real loss and will not affect the real overseas purchasing power of the foreign-exchange reserves."
The yuan hit a 17-year high yesterday as the People's Bank of China, the central bank, set a record reference rate before the sixth anniversary of the scrapping of a peg to the US dollar.
The central bank set the central parity of the yuan at 6.4592 per US dollar, up 0.14 percent. It's a record high since China de-pegged the yuan from the greenback on July 21, 2005.
Economists have called for the daily trading band, which sits at 0.5 percent now, to be relaxed. The range was last widened to 0.5 percent from 0.3 percent in May 2007.
SAFE also urged the US to be responsible to the investors of US sovereign debts.
"Adding or cutting US treasuries are normal investment options, considering different market conditions," SAFE said. "China has noticed Standard & Poor's and other rating agencies' comments on the US debt issue, and we hope the US government can take responsible actions to enhance global financial markets' confidence and respect and safeguard interests of investors."
SAFE made the comments in a statement titled "Questions and Answers to Hot Issues Concerning Foreign-Exchange Reserves."
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