China's foreign exchange reserves are set to hit the US$1 trillion mark at the end of this month or beginning of December, state media reported. China's reserves of foreign currency stood at US$987.9 billion at the end of September, pushed forward by a growing trade surplus and a huge inflow of foreign direct investment, which hit US$42.59 billion during the first nine months of the year. The ballooning pool of foreign reserves may be a big reason behind the loose money supply, economists say, because the central bank has to issue additional money to soak up excess US dollars in the market.
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