09:08 China's Central Bank Zhou says China to cut "small piece" of reserves for new forex management agency -- Reuters
Zhouwas also cited by a publication as saying that China will notaccumulate more foreign reserves. The comment has prompted weakness inthe $/¥, which has caused a corresponding decline in SPM.
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China to stop accumulating foreign reserves - Zhou
GUATEMALA CITY, March 20 (Reuters) - China will stop stockpiling its massive foreign reserves, China's central bank governor Zhou Xiaochuan said in an interview published on Tuesday.
"Many people say that foreign exchange reserves in China are (already) large enough," Zhou told the Emerging Markets magazine, whose latest issue was released at a meeting of the Inter-American Development Bank in Guatemala.
"We do not intend to go further and accumulate reserves," Zhou said, adding the government will "cut a small piece of reserves" for a new agency to be set up by China's central bank and finance ministry to manage its massive foreign reserves, which have swollen because of the trade surplus.
He said the agency would begin operating this year and focus on profitability and absorbing liquidity, although he did not say how much money would be passed to it.
China's premier, Wen Jiabao, said last week that plans to form a new agency to invest part of the country's swollen foreign exchange reserves, the world's biggest at more than $1 trillion, would not have an adverse impact on the U.S. dollar…