China’s foreign reserves hit $2.45 trillion

China’s foreign reserves reached $2.45 trillion dollars by the end of June, a 15.1 percent increase year on year, the central bank said Sunday.

However, its reserves increased by only $7.2 billion in the second quarter, a sharp drop from the first quarter when it grew by $126.5 billion, according to the People’s Bank of China.

The reserves are closely watched in the United States, where China recycles its trade surpluses by buying Treasury securities and other government debt.

It took China a decade to accumulate its first $1 trillion in foreign reserves by 2006 but growth skyrocketed as trade boomed and the total passed $2 trillion last April. It surged to $2.4 trillion by the end of 2009.

China is the U.S. government’s biggest foreign creditor but has trimmed its Treasury holdings by several billion dollars in recent months.

Source: AP