Central Banks to Boost Euro Holdings, China's Wu Xiaoling Says
By Jake Lee and Meera Louis
June 1 (Bloomberg) -- Central banks will boost holdings of the euro as the European region's economy expands and the currency remains ``stable,'' said Wu Xiaoling, vice governor of the People's Bank of China.
The single currency of 13 nations from the European Union has risen 1.9 percent this year against the dollar as the area's growth beat economists estimates and the European Central bank raised interest rates to 3.75 percent. Wu reiterated China doesn't plan to cut its holdings of dollars, which make up most of its $1.2 trillion in foreign-exchange reserves.
``With the economic development of the EU and the stability of the euro in the reserves of central banks, the proportion of euros is going to grow,'' Wu said yesterday at a conference in Brussels. ``We don't plan to decrease the part of dollars in our reserves. I'm only explaining that the world tendency is to have part of euros as well.''
The euro traded at $1.3451 per dollar and 163.84 per yen as of 11:30 a.m. in Hong Kong. The yuan was at 7.6467, within 0.1 percent of its strongest since China scrapped a dollar peg in 2005 and moved to managing it against a basket of currencies including the euro, yen, British pound and South Korea's won.
Europe's economy expanded 0.6 percent in the first three months, from 0.9 percent in the fourth quarter, the European Union's Luxembourg-based statistics office said May 15. Economists expected 0.5 percent expansion, according to a Bloomberg News survey.
China May 18 widened the daily band the yuan is allowed to trade in to 0.5 percent as the U.S. pressures the world's fastest-growing economy to allow quicker gains to ease global trade imbalances. The U.S. trade deficit with China jumped to a record $232.5 billion last year.
``If we want to adjust this imbalance in China we have to first increase the flexibility of foreign exchange,'' said Wu. ``This process will not move faster as a result of the existence of external pressures. Similarly, this process will not slow down as a result of the absence of such pressure.''
By Jake Lee and Meera Louis
June 1 (Bloomberg) -- Central banks will boost holdings of the euro as the European region's economy expands and the currency remains ``stable,'' said Wu Xiaoling, vice governor of the People's Bank of China.
The single currency of 13 nations from the European Union has risen 1.9 percent this year against the dollar as the area's growth beat economists estimates and the European Central bank raised interest rates to 3.75 percent. Wu reiterated China doesn't plan to cut its holdings of dollars, which make up most of its $1.2 trillion in foreign-exchange reserves.
``With the economic development of the EU and the stability of the euro in the reserves of central banks, the proportion of euros is going to grow,'' Wu said yesterday at a conference in Brussels. ``We don't plan to decrease the part of dollars in our reserves. I'm only explaining that the world tendency is to have part of euros as well.''
The euro traded at $1.3451 per dollar and 163.84 per yen as of 11:30 a.m. in Hong Kong. The yuan was at 7.6467, within 0.1 percent of its strongest since China scrapped a dollar peg in 2005 and moved to managing it against a basket of currencies including the euro, yen, British pound and South Korea's won.
Europe's economy expanded 0.6 percent in the first three months, from 0.9 percent in the fourth quarter, the European Union's Luxembourg-based statistics office said May 15. Economists expected 0.5 percent expansion, according to a Bloomberg News survey.
China May 18 widened the daily band the yuan is allowed to trade in to 0.5 percent as the U.S. pressures the world's fastest-growing economy to allow quicker gains to ease global trade imbalances. The U.S. trade deficit with China jumped to a record $232.5 billion last year.
``If we want to adjust this imbalance in China we have to first increase the flexibility of foreign exchange,'' said Wu. ``This process will not move faster as a result of the existence of external pressures. Similarly, this process will not slow down as a result of the absence of such pressure.''
Atom Feed (xml)