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Thursday, February 20, 2014
Federal Reserve's QE Exit Put Pressure on China’s Foreign Exchange Reserve Reform
ANBOUND

Based on the International capital flow report that released by the US Treasury Department on February 18, China has increased its holdings of US mid-long term government bonds by $81.1 billion in 2013, it is also the nation's biggest annual net increase since year 2009. ANBOUND research team thinks that the Federal Reserve’s QE exit will put pressure on China’s foreign exchange reserve reform. Moreover, the ongoing US debt holding will only lead to a greater loss. Foreign exchange reserve reform can be divided into two types namely increment and stock. Increment reserve requires enlarging import and investment abroad meanwhile stock reserve requires diversified reforms in foreign exchange reserve.

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