Beijing – China is increasing its usage of the yuan to settle transactions in foreign trade.
Zhou Xiaochuan, governor of the People's Bank of China, said China's $3 trillion in foreign reserves is “excessive.”
“Foreign exchange reserves have exceeded our country's rational demand, and too much accumulation has caused excessive liquidity in our markets, adding to the pressure of the central bank's sterilization.”
Analysts labeled the statement as a “clear warning” to U.S. Treasury officials to institute new management measures to control the worth of the dollar, largely viewed by overseas investors and analysts to be in free fall. Mr. Zhou's remarks are viewed as a possible indication that China wants out of its extensive dollar holdings.
The nation is buying all the commodities it can – items such as wheat, coal, scrap steel and oil.
International banking authorities and security analysts were all a-twitter at the end of August when the high-ranking official disappeared for an extended period. Many spread the rumor that he had defected over a troubled reputation caused by his extensive holdings in U.S. dollars, viewed then by some as a perilous policy by some in the Chinese financial and governmental community.
Further indication of the trend may be seen in a steady rise in the price of gold – up 0.6% today and topping the psychological barrier of $1,500 per ounce – and silver, which advanced 2.7% to top $45 per ounce, “despite the apparent lack of inflation in our economy.”
Zhou Xiaochuan, governor of the People's Bank of China, said China's $3 trillion in foreign reserves is “excessive.”
“Foreign exchange reserves have exceeded our country's rational demand, and too much accumulation has caused excessive liquidity in our markets, adding to the pressure of the central bank's sterilization.”
Analysts labeled the statement as a “clear warning” to U.S. Treasury officials to institute new management measures to control the worth of the dollar, largely viewed by overseas investors and analysts to be in free fall. Mr. Zhou's remarks are viewed as a possible indication that China wants out of its extensive dollar holdings.
The nation is buying all the commodities it can – items such as wheat, coal, scrap steel and oil.
International banking authorities and security analysts were all a-twitter at the end of August when the high-ranking official disappeared for an extended period. Many spread the rumor that he had defected over a troubled reputation caused by his extensive holdings in U.S. dollars, viewed then by some as a perilous policy by some in the Chinese financial and governmental community.
Further indication of the trend may be seen in a steady rise in the price of gold – up 0.6% today and topping the psychological barrier of $1,500 per ounce – and silver, which advanced 2.7% to top $45 per ounce, “despite the apparent lack of inflation in our economy.”
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