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Record growth for China foreign reserves
2002/02/19

Beijing - China's foreign exchange rate reserves climbed to a record $217.4 billion at the end of January 2002 according to Bloomberg.

It is an increase of $5 billion from the previous month according to People's Bank of China Governor Dai Xianglong. Dai repeated his pledge to keep the currency stable at a speech in Hong Kong to the General Chamber of Commerce last night.

``The Renminbi exchange rate is reasonable at the moment, and we would like it to remain stable,'' Dai said who previously attended a meeting of central bankers from Asia organized by the Bank of International Settlements.

China's immense foreign reserves, following Japan as the second largest in the world, will simplify the procedure to keep its currency hooked at about 8.3 to the U.S. dollar.

Dai cautioned about the effect of devaluating the Japanese Yen that it might spread over the Asian region as governments try to protect their national export by devaluating their own currency. However, Dai remained determined to keep the Remnibi hooked to the U.S. dollar.

Dai also looked into the possibility to cut rates for the first time in more than two years. A date hasn't been set according to Bloomberg on whether the Chinese government will lower interest rates to combat the slowing global economic growth.

Last year the Chinese GDP decreased about 0.7 percent to 7.3 percent from the previous 8 percent in 2000.

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