US dollar declines, no change in China’s currency reserve policy
- Source: Global Times
- [18:01 June 29 2009]
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by Daniel Tonga
The US dollar continued to fall against the Chinese yuan amid renewed calls from People’s Bank of China to replace it with a new global currency.
The decline also comes after People’s Bank of China Governor Zhou Xiaochuan assured his country there would be no sudden change in China’s currency reserve policy.
“Our foreign-exchange reserve policy is always quite stable,” Zhou said when he addressed journalists yesterday at a central bankers’ meeting in Basel, Switzerland.
“There are not any sudden changes.” He stressed.
On June 26 the dollar suffered a massive decline, after calls to replace it fuelled speculation.
The dollar, measuring the currency’s performance against six trading partners rose 0.2 percent to 80.07 in the dollar index in Hong Kong, and dropped by 1 percent on June 26, before ending the day lower 0.7 percent.
Some Chinese investors, the biggest foreign owners of US treasuries, cut holdings by $4.4 billion in April to $763.5 billion after Premier Wen Jiabao expressed concern about the decline in value of the assets China held in US dollars.
The decline in the value of assets held in dollars came as China boosted its holdings by $23.7 billion.
In May, China and Brazil began making proposals aimed at moving away from the dollar to settle trade and use Chinese renminbi.
Exports have also slumped in the face of global recession, but according to Chinese economists, China’s economy is expected to grow 8 percent this year and more than 9 percent annual by 2011.
(Agencies)