Follows currency turbulence. PM concerned about preserving value of $1.43-trillion foreign-exchange reserves
China's central bank voiced support for a strong dollar yesterday just as the country's prime minister expressed concerns over preserving the value of the nation's $1.43-trillion (U.S.) foreign exchange reserves.
Central bank governor Zhou Xiaochuan said Beijing hoped for an orderly solution following recent market turbulence stirred by defaults of U.S. mortgages and that it sought dollar strength given the global economic context.
"So in this sense actually we hope to see a strong dollar," he told reporters.
"We support a strong dollar," he said, adding his comments were unrelated to China's foreign exchange reserves.
Zhou's comments in South Africa coincided with others relayed by Chinese Prime Minister Wen Jiabao in Singapore.
In a speech touching on other economic issues, Wen said Beijing was under pressure to preserve the value of its reserves, the world's largest.
"We have never been experiencing such big pressure," Wen told a business gathering. "We are worried about how to preserve the value of our reserves."
China does not disclose the composition of its reserves, but some analysts reckon 65 per cent to 70 per cent are held in dollar-denominated assets. Analysts also believe Beijing has gradually reduced the proportion of its dollar holdings to diversify its investments.
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