As China’s foreign-exchange reserves and money supply growth continue to increase, pressures on interest rates and exchange rates are mounting. Read the story from The Wall Street Journal:
China’s foreign-exchange reserves, the world’s largest, rose to just below $1 trillion at the end of September, while money-supply growth eased, according to data issued Friday.
As China continues to record large trade surpluses, analysts expect that foreign-exchange reserves will remain on a strong upward trend. At the same time, money-supply growth, while slightly slower than in the previous month, remains above the central bank’s target.
China’s foreign-exchange reserves totaled $987.9 billion at the end of last month, up 28.5% from a year earlier, the People’s Bank of China said.
The country’s broadest measure of money supply, M2, was up 16.8% from a year earlier at the end of September, the slowest growth rate so far this year, although still above the central bank’s full-year target of a 16% rise.[Full Text and Subscribers Only]