Former People’s Bank of China governor Dai Xianglong said China retained the option of increasing its holdings of US Treasury debt if the dollar remained stable, Reuters reported. Dai, the current chairman of the National Social Security Fund made the comments in an essay published in the state-backed China Finance magazine. The essay comes a week after Dai said that China had no choice but to continue buying US Treasuries. Dai emphasized that continued investment in Treasuries would not come at the expense of long-term diversification of foreign exchange reserves, and that it was incorrect to "simply describe the current situation of China’s foreign-exchange reserve management as one of falling into a ‘dollar trap’."
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