By Lee J. Miller and Zhang Dingmin
Nov. 28 (Bloomberg) -- China’s foreign-exchange reserves may top $2 trillion for the first time by the end of this year, giving the world’s most-populous nation more firepower to stimulate its economy during a global recession.
China’s holdings increased 25 percent in the first nine months of the year to stand at $1.906 trillion on Sept. 30. Reserves shrank in Japan and Russia, the nations with the second- and third-largest stockpiles. Russia drained a quarter of its currency and gold assets in less than four months to prop up the ruble, which has dropped 14 percent since June 30.
The CHART OF THE DAY compares the reserves of China, Japan and Russia, according to data compiled by Bloomberg and comments from government officials. The $2 trillion milestone will “hopefully” be reached this year, Yao Jingyuan, chief economist for the National Bureau of Statistics, said yesterday.
China has been “building liquidity” with reserves increasing by more than $470 billion this year, Morgan Stanley said in a report. “As China goes, so will go Asia.”
China reported a record $35.2 billion trade surplus last month. Its reserves surpassed those of Japan for the top spot in January 2006.
To contact the reporters on this story: Lee J. Miller in Bangkok at lmiller@bloomberg.net; Zhang Dingmin in Beijing at Dzhang14@bloomberg.net
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