China will continue to diversify its foreign exchange reserves despite lingering uncertainty over the stability of the European Union, reported the Wall Street Journal. "Diversification is a long-term trend," said Xia Bin, an advisor to China’s central bank. While the makeup of China’s US$2.5 trillion foreign exchange reserves remains confidential, concerns that China is overinvested in the US dollar have encouraged a move towards purchasing diversifying currencies including the euro. Despite the euro’s current imperiled status, China’s fears over the long-term effects of US deficits may encourage it to view the euro’s decline as a buying opportunity. The euro has fallen nearly 20% since the end of last year as the Greek fiscal crisis has dampened European forecasts.
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