The People’s Bank of China said that the country’s foreign exchange reserves declined by US$25.9 billion in October, but then rebounded in November and December to end the year at US$1.9 trillion, the Wall Street Journal reported. The central bank did not disclose the reason for October’s drop in foreign exchange reserves. The threat of currency outflows has kept the government from allowing the value of China’s currency, the yuan, to depreciate despite demands from the country’s exporters. A cheaper yuan would make exporters’ goods more attractive to buyers from the US and Europe who have been purchasing fewer Chinese goods during the global economic downturn.
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