China’s foreign-exchange reserves rose to a record high of $2.65 trillion at the end of September amid rising global concerns about the country's curbs on gains in the Yuan and its negative impacts on the world economy.
The Chinese holdings surged $194 billion in the quarter ending Sept. 30, according to a statement released by the People’s Bank of China. The September exports are the second highest on record at $145 billion, according to a report released by the customs bureau.
The boost is attributed to trade surplus and cash inflows from foreign direct investment and through hot money betting on gains by the Chinese currency. The currency rose up to 16.5 percent by the end of September when compared with its ratios the previous year.
Chinese imports surged to a new record value of $128.1 billions, diminishing the surplus to its lowest ratio in five months. For January-through-September, the trade excess was $120.6 billion, showing a decline of around 10.5 percent from a year earlier, according to customs bureau report.
Chinese banks extended around 595.5 billion Yuan, or $89 billion, in new local-currency loans last month, which was higher than expectations.
Banks have lent about 6.3 trillion Yuan in the current year and can offer up to 400 billion Yuan in each of the final three months as per the government's target of restraining new lending to 7.5 trillion Yuan.
China holds the largest foreign-exchange reserves in the world but its policy of purchasing dollars to curb the appreciation of Yuan has regularly come under fire, including from the U.S. Treasury Secretary Timothy Geithner who said the Chinese measures are distorting the global currency system.
