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Dollar Losing Ground As Equities Head North

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     BEIJING (MNI) - The value of China's foreign exchange reserves in November
rose for the first time since August, according to data released on Friday by
the State Administration of Foreign Exchange.
     - FX reserves increased by $8.6 billion to $3.06 trillion in November,
compared with $33.9 billion drop in October. The value of the total reserves is
still the second-lowest this year, up from October's low of $3.05 trillion.
     - SAFE said the higher valuation of China's FX reserves was due to
conversions and changes of asset prices in major countries. The moderate gain in
the price of foreign treasury bonds drove up the valuation, according to SAFE.
     - SAFE said the yuan "fluctuated in both directions with more flexibility,"
the supply and demand of the foreign exchange market were basically in balance,
and cross-border capital flow was generally stable.
     - SAFE said China is facing external uncertainties, but the domestic
economy is resilient and able to withstand risks. Fx reserves are expected to
remain stable while fluctuating, it said.
     - The yuan appreciated 0.43% against the U.S. dollar last month. MNI
believes that as the depreciation pressure remains in the long term, the central
bank may use the FX reserves to defend the currency.
--MNI Beijing Bureau; +86 (10) 8532-5998; email:
--MNI Beijing Bureau; +86 10 8532 5998; email:
[TOPICS: MAQDS$,M$A$$$,M$Q$$$,MT$$$$]
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