Chinese foreign exchange reserves reach US$ 1.33 trillion in first half of year.

13 July 2007

Beijing, China, 13 July – China’s foreign exchange reserves grew by more in the first half of the year than during the whole of 2006, exceeding US$ 1.33 trillion at the end of June, the country’s central bank has said.

Chinese reserves grew by US$ 266.3 billion in the first half of the year, more than US$ 144 billion that in the same period in 2006, the People’s Bank of China said Thursday in a statement on its website.

Total exchanges growth for 2006 was US$ 247 billion.

Foreign exchange reserves grew 41.6 percent in 12 months and have now swollen to US$ 1.3326 trillion, according to the central bank.

It is estimated that 70 percent of China’s reserves are in US dollars, exposing China to massive financial losses due to the sliding value of the American currency.

In a bid to counteract this trend, the Beijing government is preparing to launch a state investment agency to manage a fifth of its foreign exchange reserves, the world’s biggest, betting on a strategy of diversification. (macauhub)