The modest growth of China's foreign....>

CHINA PRESS: The modest growth of China's foreign exchange reserves in recent

months is hardly sustainable and has not created strong support to liquidity in

the interbank market, the China Securities Journal reported Thursday. The yuan

exchange rate is likely to suffer depreciation pressure and foreign exchange

reserves could decline in the period ahead given the Federal Reserve is expected

to raise its interest rate in December and capital outflows are likely to

increase at the end of the year, the report warned. The People's Bank of China

has reduced its intervention in the foreign exchange market, which means the

forex position will not see a big jump, the report argued. The open market

operations of the PBOC will focus on effects of fiscal spending and forex

position, so the liquidity will remain tightly balance, the report noted. (China

Securities Journal)