Foreign Exchange News
- Huijin to help manage forex reserves
Date: 6-Mar-2007 Sources: (Shenzhen Daily)
THE government will use government-owned Central Huijin Investment Co., which holds stakes in banks, to help manage the nation's US$1 trillion in foreign currency reserves, the central bank's vice governor said yesterday.
Wu Xiaoling said Huijin will 'play a role'' in managing the reserves. She didn't give further details, including the amount to be managed.
The government is seeking to invest its reserves more effectively to support an economy that grew 10.7 percent last year, without causing large swings in global markets. The U.S. dollar slumped 1 percent against the euro in the week ended Nov. 11 after central bank governor Zhou Xiaochuan said he plans to diversify holdings.
China, the second-largest holder of U.S. Treasuries, now mainly invests its foreign currency reserves in U.S. bonds through the central bank-controlled State Administration of Foreign Exchange. The nation increased holdings of the securities by 12.5 percent last year to US$349.6 billion, slowing from a 39 percent accumulation in 2005.
U.S. Treasuries returned 3.14 percent last year, according to Merrill Lynch & Co. The MSCI World Index of stocks jumped 19 percent.
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