KEY POINTS:
China has passed another major milestone in its economic development, accumulating US$1 trillion ($1.5 trillion) of foreign currency reserves.
The reserves hit US$987.9 billion at the end of September and have been expanding at such a rapid pace that they had been expected to surpass US$1 trillion at any time.
The achievement will be seen as another sign of the imbalances in the global economy that bodies such as the International Monetary Fund fear could eventually trigger a slump.
The IMF has said that the reserves will top US$2 trillion in 2010, with the vast majority of the liabilities being held by the United States.
It will also fuel calls in the US for China to revalue its currency, the yuan, that was pegged to the US dollar for a decade, being allowed to float within a tight range last year.
Rob Carnell, a currency analyst at ING Financial Markets, said critics in the US should bear in mind that some of the money flowing into China was being used by speculative investors to bet on a sudden 10 per cent revaluation of the yuan.
- INDEPENDENT
