China Must Invest Forex Reserves In Oil, PBOC Official Says

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China must invest its foreign exchange reserves in oil and other strategically important resources as part of its efforts to diversify its foreign exchange reserve investments, a Chinese central bank official was quoted as saying by the Financial News, a newspaper published by the central bank.

Sheng Songcheng, head of the People's Bank of China's Shenyang branch said that such investments must be done by professional investment companies, which can purchase foreign exchange reserves from the market or the PBOC.

Sheng admitted that increasing foreign exchange reserves would raise pressure for yuan appreciation but pointed out that a rise in yuan also depended on many other factors.

China has the largest foreign exchange reserve holdings in the world at $2.27 trillion as of September 30, 2009.

China must invest its foreign exchange reserves in oil and other strategically important resources as part of its efforts to diversify its foreign exchange reserve investments, a Chinese central bank official was quoted as saying by the Financial News, a newspaper published by the central bank. (Market News Provided by RTTNews)