China’s Holdings Rose In November

Despite the slump in Asia’s reserves, China’s holdings rose in November of 2005. The Asian slump in foreign exchange reserves excluded China’s, who submits reports on a quarterly basis.

Analysts say Asia’s foreign exchange reserves could have increased if China’s holdings were included in the November report. China’s trade and current account surpluses were high last November and would have prompted the central bank to buy Dollars.

With last published reserves at $769 billion last September, China’s reserves would have boosted Asia’s reserves to $2.64 trillion. Asia’s foreign exchange reserves would have increased by $194 billion in 2005 due to China’s reserve increase at $159 billion in the first nine months of the year.

Analysts speculate that the surging reserves might prompt China to diversify some of its reserve holdings into gold, which have further driven gold prices to increase by 8% at $540.90 per ounce from $495.0 per ounce.

(Source: Asia Forex Reserves Fall In Nov As Funds Flee Malaysia, Daily Times Site Edition)