Of­fi­cial: For­eign ex­change re­serves ‘ad­e­quate’

China Daily (Canada) - - NEWS CAPSULE -

China's for­eign ex­change re­serves, which have dropped to about $3 tril­lion from a peak of nearly $4 tril­lion two years ago, are cur­rently ad­e­quate, said a State Ad­min­is­tra­tion of For­eign Ex­change of­fi­cial.

The of­fi­cial, who de­clined to be named, said that "$3 tril­lion is, at least seen from the cur­rent sit­u­a­tion, ad­e­quate". In the fu­ture, China's scale of for­eign ex­change re­serves might fluc­tu­ate around cer­tain lev­els, given un­cer­tain­ties caused by chang­ing do­mes­tic and in­ter­na­tional eco­nomic sit­u­a­tions, which is nor­mal, she said.

China's re­duc­tion of US Trea­sury se­cu­ri­ties hold­ings, mean­while, is not a strate­gic move, since US Trea­sury se­cu­ri­ties are the most im­por­tant in­vest­ment port­fo­lio in the in­ter­na­tional mar­ket, said the of­fi­cial.

China's hold­ings of US debt fell to $1.12 tril­lion at the end of Oc­to­ber, the low­est level in more than six years, ac­cord­ing to US Trea­sury Depart­ment data.

China un­loaded a to­tal of $41.3 bil­lion in Trea­sury se­cu­ri­ties in Oc­to­ber, and Ja­pan re­placed it to be­come the largest holder of US debt, trig­ger­ing mar­ket spec­u­la­tion that China is dump­ing its dol­lar as­sets.

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