Statistics

China's Sept new yuan loans rose to 595.5b yuan

(Xinhua)
Updated: 2010-10-13 14:45

Foreign exchange reserves soar

China's foreign exchange reserves totaled $2.6483 trillion by the end of September, up 16.5 percent year on year, the central bank said.

The added amount in the third quarter alone reached $194 billion in the third quarter, a big rise compared to the $47.9 billion increase in the first quarter and only $7.2 billion in the second quarter.

Experts attributed the sharp build-up of forex mainly to the increasing inflow of "hot money" on outlook of a stronger yuan.

Guo Tianyong, head of the China Banking Research Center at the Central University of Finance and Economics, said that the international tensions over exchange rates boosted demand for yuan as a safe haven asset, especially after the central bank pledged more flexibility of the yuan.

The expectation of a stronger yuan and the sound economic development accelerated the inflow of foreign capital, he added.

Related readings:  China's August new lending expands to 545.2b yuan  Chinese banks' forex surplus hits $29.1b in Aug  Chinese banks' forex surplus tops $26.6 in July  Commercial banks' refinancing to exceed 200b yuan

China set the central parity rate of the yuan at 6.6693 per US dollar on Wednesday, driving its value to a new high against U.S. dollar, according to the data released by the China Foreign Exchange Trading System.

The value of the yuan rose against the US dollar by about 1.74 percent in September, the biggest monthly gain since the July 2005 revaluation.

Based on Wednesday's central parity, the yuan had gained 2.32 percent from the rate of 6.8275 per US dollar that was set a day before the PBOC's pledge to increase flexibility on June 19.

China's foreign exchange regulator, the State Administration of Foreign Exchange on Tuesday warned of "hot money inflows" in the second half of this year and beyond as investors bring money into China to benefit from higher interests rates and expected yuan appreciation.

The regulator said it would continue to stop inflows of "hot money" into China and crackdown on illegal foreign exchange activities.