2009/10/8 Kiran K Karthikeyan <[email protected]>: > and the fact that it doesn't want to devalue its own currency means it > has to keep buying $ to keep it at its current level.
Correction - buying $ actually leads to the value of the Yuan decreasing. What they don't want is it appreciating. But the basic conclusion that China is forced to buy $ due to its trade surplus and therefore wants to diverysify the risk of holding most of their reserves in $ still stands. Kiran
