China surpassed Japan in February to become the worlds largest holder of foreign exchange reserves, partly as a result of China’s efforts to maintain the yuans exchange rate, which is fixed to a basket of currencies. The momentum is unlikely to slow without a policy change, as March’s trade surplus rose to $11.2 billion, up from $5.7 billion a year earlier. The record-breaking foreign exchange reserves and accelerating trade surplus will further increase pressure for China to establish a more flexible exchange rate.

posted by Administrator at 1:14 am & filed under Euros |