SAFE spokesman refutes rumors of forex bonds selling

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Last updated at: (Beijing Time) Tuesday, January 06, 2004

SAFE spokesman refutes rumors of forex bonds selling

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A spokesman for the State Administration of Foreign Exchange (SAFE) Tuesday, Jan. 6, refuted the rumors that China was selling foreign exchange bonds in large quantities in the international financial market.

In an interview with Xinhua, the spokesman said China had injected part of its foreign currency reserve into the Bank of China and China Construction Bank, two of its "big four" state-owned commercial banks, to increase their capital in cash.

The move is aimed to introduce the joint-stock system into the country's banking industry and the two banks are selected as pilot for the reform.

This was a once-only allocation of assets and China did not sell forex bonds in the international market, the SAFE spokesman said, adding that China is a responsible country that always abides by the rules of the international financial market.

The fund-injection move had been completed by Dec. 31, 2003, and did not bring about any negative influence on both domestic and international financial markets, he noted.

The Bank of China and China Construction Bank have now very sound liquidity, both in terms of the RMB yuan and foreign currency, according to the spokesman.

Source: Xinhua

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