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3 trillion in central bank foreign reserve to be set up by the energy and precious metals investment funds

Central Energy Fund to be established, including precious metals fund to investment funds, and re-entry policy research vision Exchange Stabilization Fund is expected to constitute a new foreign reserve management strategy.

However, the People's Bank of China (hereinafter referred to as the central bank) has not released data, China's foreign exchange reserves have exceeded 3 trillion of news spread like wildfire.

"Reserves really too much." April 18 night, at Tsinghua University forum on the financial end, the central bank governor Zhou Xiaochuan (column) revealed that the central bank to consider the use of foreign exchange reserves to do some strategic investments.

Finance New "New Century" reporter has learned from multiple authoritative sources, the central bank intends to set up foreign exchange reserves invested by professional fund categories, including energy funds, precious metals funds, are also being set up the Exchange Stabilization Fund's recommendations.

April 18 evening, the international rating agency Standard & Poor's rating of U.S. debt will be transferred to negative. Directly linked to the dollar and commodities crashed to rise. April 21, the international gold market, the overnight session in New York again to refresh a record high, up to $ 1508.9 line. Oil prices are approaching 32-month high of $ 127.

Forced to accelerate all this diversification of China's foreign reserve investment process. Publicly available data, the end of February this year, China held U.S. $ 1,154,100,000,000 national debt, remains the largest holder of U.S. Treasury bonds.

Not without coincidence, Vice Finance Minister Li Yong has also published an article in mid-April, said since 2010, the U.S. dollar and the euro's "turns" devaluation, leading to the carrying loss of foreign exchange reserves, increasing foreign exchange reserve currency management difficult.

Although close to Li Yong, informed sources said, this article is adapted from an internal talk, there is no policy signal, but reserves the difficulty of currency management is an indisputable fact. Private person outside the reserve, said: "The U.S. dollar fell, some people suggested that we buy the euro, the European debt crisis came, these people suggest throwing the euro, these words can listen to it?"

"Everyone knows not to put eggs in one basket, so one way is to consider some of the new investment agency, to try new styles and areas of investment." Zhou said, "the direction is determined."

Chinese Academy of Social Sciences researcher at the Institute of World Economics and Politics, said Yu Yongding, the U.S. Treasury is not a safe haven asset, and the "stop on the foreign exchange market intervention, the central bank will get rid of the interference from the exchange rate policy and concentrate on tackling inflation."

Outside the reserve to invest in new way

"Professional foreign exchange reserve investment fund", which was established in different industry sectors such as precious metals funds, energy funds and other specialized investment funds. This operation similar to the "Norwegian model."

Norway's oil trade held by the higher foreign exchange reserves, to the Ministry of Finance and Norges Bank jointly led system. "China's central bank and the Norwegian central bank communication a lot, Governor Zhou also visited the Norwegian." A central bank sources.

According to official website of the People's Bank of China published the information, the Norwegian central bank investment management organizations (Norges Bank Investment Management, NBIM) is an independent agency of the central bank, the commission accepted the Norwegian Ministry of Finance, a global pension funds for government investment in international assets, and manage most of the foreign exchange reserves and the Government Petroleum Insurance Fund. Norwegian Oil and Energy is the owner of the Government Petroleum Insurance Fund, the central bank is the operating manager.

Norges Bank's foreign exchange reserves into liquidity and foreign portfolio investment portfolio in two parts. NBIM responsible for the management of the central bank's foreign reserves portfolio section. Norges Bank Monetary Policy Committee is responsible for managing liquidity portfolio. Norges Bank's foreign exchange reserves management, the Executive Committee established guidelines. NBIM through open tender, will be part of the funds entrusted to well-known asset management company investing in New York, London, with offices in Shanghai.

Deloitte and the Bank share the investment management audit department audits, were submitted to the Government to the Governing Board of the Global Pension Fund annual audit report. Ministry of Finance Central Bank audit departments need to submit NBIM quarterly and annual management reports. Government Petroleum Insurance Fund, although the accounts managed by the central bank, but the funds are not included in the central bank's annual financial report audited by the Office of Audit General of Norway.

However, the China Investment Limited (CIC) the person learn from this model for China is not optimistic, said: "The first is the adequacy of human resources? Question, where to find these professionals? Incentives can fit?"

This is in the cast has not really solve the problem. "Cast away four years to come to the point where more mature now, other agencies but also with how much time and cost to grow?" One senior source said SAFE.

Repeat the Exchange Stabilization Fund

Familiar with the sources of monetary policy the central bank, the central bank is considering setting up a fund to buy foreign exchange directly in the foreign exchange market, not by note-issuing bank to buy foreign exchange directly. Another person close to the central bank introduced, they have once again proposed the SAFE, will add even part of the stock of foreign assets from the central bank balance sheets move out, set up the Exchange Stabilization Fund for the intervention in the foreign exchange market. Currently relevant departments are studying the program.

Exchange Stabilization Fund is used by countries to intervene in the foreign exchange market refers to a reserve fund, typically by gold, foreign exchange and local currency composition. When the foreign exchange rate, exceeding the target range when the government limits, you can throw in the market through the purchase of the currency reserves to ease foreign currencies; the other hand, when the currency appreciation too fast, can be purchased in the market through the release of the currency reserves means increase the currency supply, inhibition of currency appreciation.

At present the central issue of the practice of counting foreign exchange hedging overwhelmed the central bank has made the industry even "kidnapped exchange rate" to describe, which means foreign exchange and other operations has affected the central bank's monetary policy. Such as the recent repeated reserve increased confusion for the industry, which is part of the policy tightening, or in fact, in order to hedge part of the Foreign Exchanges.

Since April 22, 2003, the central bank has started issuing central bank bills, central bank bills as high interest cost of nearly ten thousand yuan. Central voting stock of the current 4 trillion yuan, according to the central counting over the past year the median return of 2.54% calculated, needs to have expired and the central voting to pay the outstanding amount of approximately 101.6 billion yuan in interest. This is almost the central bank's reserve for the interest cost of about 100.8 billion yuan quite.

Close to the central bank said that the current appreciation of the RMB is still expected short-term capital continued to flow into the situation will not change. This means that the central bank needs more votes to hedge foreign exchange, the central bank's interest-bearing pressure increases. But the interest in itself will lead to increase in the monetary base, offset partially offset the effect of foreign exchange. Data show that the central bank central bank bills issued each year more than half of central bank bills are used to pay principal and interest due, which means that the effect of foreign exchange hedging is falling.

Li Yang, director of Chinese Academy of Social Finance (column) back in 2007 suggested that could be considered such as the United States, Britain, Japan, as a dedicated Exchange Stabilization Fund, the main foreign exchange assets, liabilities, mainly special bond, foreign exchange assets, liabilities to fully coordinate the internal and external economic activities, the complete eradication of mutual exchange rate policy and interest rate policy constraints, institutional barriers to mutual restraint.

People's Bank of China Deputy Governor Xu Guangzhou Branch early in the central Connaught "Financial Times" published a signed article said the central bank can use the Exchange Stabilization Fund to buy or sell foreign currency in the foreign exchange market to regulate supply and demand, the exchange rate to fluctuate within the target range, To completely cut off the base currency and foreign exchange reserves of the linkage between the relationship between central bank monetary policy, restored the initiative.

Static and so funding CIC

"Unlikely to be granted new bodies, right? We are waiting for funding it." Face of China's foreign exchange reserves, a large movement of the discussion, a senior CIC said.

In his speech, Zhou Xiaochuan, the foreign currency reserve assets management, "relying on CIC (the CIC) This is not some way better." He also points out that most central bank is prepared to invest in 2003 of oil, yet suffer from lack of professional institutions to help to let the matter rest.

CIC chairman Lou Jiwei (column) that most of the assets in the investment will be entrusted to professional investment institutions. "It's more than two years of double-digit rate of return." Vote in the close source said.

CIC investment in a specific person to the Finance Ministry the new "New Century", told reporters that the recent and not feel the investment in terms of investment style and what is too much change.

Finance New "New Century" reporter from the people close to where the informed decision-making, decentralization of foreign exchange reserves will not only cast one in the commitment to consider new strategic mechanism, but not as previously when it was set up in the vote total foreign exchange reserves transferred out from the central bank.

Close to the people who voted for the new fiscal, "New Century", told reporters that the vote was founded, that is the basis for the separation of foreign exchange reserves and excess reserves. Based management of foreign reserves to maintain the security and the main short-term liquidity, while the excess foreign exchange reserves may be appropriate to the pursuit of high risk and high returns. According to the expert calculations, based fifty-six one hundred billion U.S. dollars foreign exchange reserves sufficient to meet debt and other mandatory spending. Take over management of the institution's foreign exchange reserves was mainly in the cast.

However, since the establishment in the development of investment and foreign reserves management system status and other restrictions, "on a regular basis to obtain excess foreign exchange reserves, to inject in to vote" no specific schedule.

However, he believes that the establishment of the central bank even if the professional fund, the investment re-injection of the road has not been blocked. Zhou's latest statement, in the foreign exchange investment "eggs in one basket is not" the decentralization policy, the CIC is still one of the important an institution.