October 20, 2009 08:41
Asia's major exporting economies are amassing record foreign currency reserves as they buy up U.S. dollars to keep their own currencies from strengthening too much and slowing exports.
China's foreign currency reserves rose to a record US$2.273 trillion as of the end of September, up by $327 billion or 16.8 percent since the end of last year. Japan's foreign currency reserves also rose to a record $1.53 trillion as of late September.
During the first nine months of this year Taiwan's reserves grew 13.8 percent or $40.3 billion to $332.2 billion, a new record. Hong Kong's reserves stood at $226.9 billion as of the end of September, up $44.4 billion or 24.3 percent compared to the end of last year.
Korea had around $200 billion in foreign currency reserves at the beginning of the year, but the figure began growing in March and reached $254.2 billion at the end of September, climbing 26.3 percent in the first nine months. If this rate continues, the nation's reserves are expected to reach a record $270 billion.
The Bank of Korea attributed the sharp increase to interest earnings from investments in U.S. treasures and other products. The U.S. dollar-converted value of the country's euro and yen reserves also increased as the two currencies strengthened against the greenback, it added. The increase is also believed to be the result of aggressive dollar buying by forex authorities last month as they attempted to keep the won from strengthening too quickly against the dollar and hurting domestic exporters.
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