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China's Forex Reserves at "Sufficient Level": Yi Gang

03-26 15:05 Caijing
China's foreign exchange reserves are probably already at a "sufficient level", said vice central bank governor Yi Gang

China's foreign exchange reserves are probably already at a "sufficient level", vice central bank governor Yi Gang told an economic forum in south China's Guangzhou on Sunday.

China's foreign exchange reserves stood at 3.18 trillion U.S. dollars ending December 2011, compared with 3.2 trillion in the third quarter, data published on the central bank's official website showed earlier this year.

For foreign exchange reserves, it is not the more the better, said Yi Gang, who also heads China's State Administration for Foreign Exchange. China must weigh the marginal costs and benefits of acquiring additional reserves, he added.

When asked about by an audience when the stockpile of foreign exchange reserves would start benefiting the general public, Yi said they would once they were willing to hold foreign currencies, which would not happen until Chinese currency, the yuan, reaches an equilibrium level and could float freely in two directions.

China is currently in the process of liberalizing the yuan so it can be set by the market "in a flexible manner," which would put the yuan on a path to becoming a global currency.

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