Central bank to set up forex-reserve investment funds

China’s central bank is planning to set up investment funds that target sectors like energy and precious metals, and examining the possibility of creating a foreign-exchange stabilization fund, Dow Jones reported, citing state media. The report said that officials are considering a suggestion by the People’s Bank of China (PBoC) that the country’s forex regulator should use some of the foreign-exchange assets from the central bank’s balance sheet to set up a fund to intervene in the forex market. In general, a forex stabilization fund is generally composed of gold, forex and domestic currency. China’s forex reserves totaled US$3.0447 trillion at the end of March, up from US$2.8473 trillion at the end of 2010, according to the PBoC.