China’s forex reserves largest in world

It was probably inevitable: China’s foreign exchange reserves are now the largest in the world, having recently surpassed $850 Billion. The reserves are both a product of China’s massive current account surplus and the $100 Billion+ that the nation attracts in foreign investment each year. Further, experts do not expect China to slow its accumulation of reserves, which may reach $1 Trillion by the end of the year. As the

US Senators visit China to discuss Yuan

Earlier this week, US Senators Charles Schumer and Lindsey Graham concluded a trip to China, during which they met with top-level Chinese officials to discuss economic issues. The most important item on their agenda, naturally, was to press China to further revalue the Yuan. In less than a week, in fact, the Senate is set to vote on whether Schumer’s bill, which calls for a 27.5% tariff to be levied on all Chinese imports, should be advanced. Evidently, Senators Schumer and Graham left the talks satisfied, indicating that the Yuan should likely break through a level of psychological importance in the near future. The China Daily reports:

Premier Wen Jiabao said eight days ago that the range for the yuan’s fluctuation would be widen. But there will not be a one-off revaluation like the one in July, he said.

Read More: US must grasp reality of China forex policy

China may widen Yuan trading band

In a recent interview, the always-coy Chairman of China’s Central Bank hinted that China may widen of the band in which the Chinese Yuan is permitted to move. The current band allows the Yuan to fluctuate +/- .3% per day, although in practice, the currency rarely moves by more than .01% per day. The Chairman was adamant, however, that China would not execute another one-off revaluation of the Yuan, like it did last summer. Rather, the RMB will continue to appreciate gradually, so as not to shock the global economy. Reuters reports:

Chinese officials have recently pledged to gradually increase the yuan’s flexibility by making better use of its daily trading band rather than doing another one-off revaluation.

Read More: China c. bank says it might widen yuan trading band