Asia 2009 foreign exchange reserves jump 18pct to record $5.2trn

Foreign exchange reserves held by Asian central banks surged by $779.7bn in 2009 to a record $5.2trn, central bank data showed. The near 18 per cent increase was led by a $453.2bn jump in China's reserves, the world's largest, to an all-time high of $2.4trn. The rise partly reflected currency valuation effects and was not due to inflows of funds from speculators, China's currency regulator said on Tuesday, apparently trying to cool down market expectations of a firmer yuan this year. Hong Kong's reserves rose by $73.3bn in 2009, followed by a rise of $68.8bn in South Korea and $56.5bn in Taiwan's holdings, the data showed. In December alone, overall reserves held by Asian central banks fell by $16.5bn largely due to valuation effects as the US dollar rallied against euro and other major currencies. Most of the reserves are held in US assets, usually Treasury bonds. A $900m drop in South Korean's holdings in December, the first such dip in 10 months, was caused by weaker non-dollar assets.