For surplus countries that want to accumulate reserves, it would reduce exchange rate risk.

Accordingly, the following two reserves were charged to surplus income of the 1992 1993 biennium

Latin America will finish 2007 with a current account surplus and growing foreign currency reserves, insulating them from financial crisis.

A reduced Chinese appetite for reserves would be reflected in an appreciation of its currency and a reduction in its trade surplus.

But if exports continue to grow in the absence of consumption led import growth, distortions occur and the trade surplus and foreign reserves increase.

China s purchases of American debt effectively transferred the official reserves gained via China s trade surplus back to the US market.

The consolidated primary surplus is 5 per cent of GDP and reserves have increased from nearly ten billion dollars to over twenty five billion.

Second, China s fiscal surplus, growing foreign exchange reserves, and high savings rate have ensured the financial resources needed to maintain adequate investment and sufficiently rapid growth.

One strategy, termed benign neglect, was to let the surplus countries pile up reserves until they realized that they had a very big problem.

This would not only reduce China s surplus and its need to keep accumulating dollar reserves but also give Asian companies an incentive to reorient production towards domestic markets.

Japan, with a surplus of saving, a strong currency, massive foreign exchange reserves, and factories without domestic orders, should take the lead in providing this funding for infrastructure.

After emerging from the crisis, indicators show a sustained growth in the economy, and a surplus in the fiscal external accounts, together with a recovery in national reserves.

Reserves Reserves for budgeted separations

The total gross gold and foreign reserves declined from R13.2 billion in August 1992 to R9.5 billion in March 1993, reflecting the smaller current account surplus and the capital outflow. 52

LIABILITIES AND RESERVES

RESERVES AND LIABILITIES

With rebalancing will come a decline in China s surplus saving, much slower accumulation of foreign exchange reserves, and a concomitant reduction in its seemingly voracious demand for dollar denominated assets.

As a surplus saver, China has run large current account surpluses since 1994, accumulating a massive portfolio of foreign exchange reserves that now stands at almost 3.7 trillion.

The country has the world's largest natural gas reserves, the 8th largest oil reserves, and the second largest coal reserves.

Reserves and fund balances

Total, reserves and liabilities

(h) Surplus

SURPLUS (DEFICIT)

Reserves

Proven oil reserves total world oil reserves (percentage)

Natural gas reserves total world gas reserves (percentage)

In the third quarter of this year, China s foreign exchange reserves increased by 194 billion, which far exceeded the country s 66 billion trade surplus and 23 billion in inflows of foreign direct investment.

These loans are based on a banks reserves, and reserves are derived from deposits.

(c) Fund balances and reserves

Net surplus balance

Gross surplus (deficit)

Net surplus (deficit)

Partly by design and partly by chance, about a decade ago China found itself consistently accumulating large amounts of foreign reserves by running a trade surplus and intervening to buy up the dollars that this generated.

International reserves

INCLUDING RESERVES .

Moreover, China sits on roughly 3.3 trillion in foreign exchange reserves much of it in dollars, but also in other major currencies owing to its large trade surplus in recent decades.

Africa s natural gas reserves amount to about 8 of global reserves.

The country was running a current account surplus, but the pound was slipping against the dollar, causing the Bank of England to sell its dollar reserves to defend the fixed exchange rate.

China s Shrinking Trade Surplus

X. Surplus balance . 42

Surplus (deficit ) for period

XI. Surplus balance . 55

Net surplus balance 70.9

In essence, implementing the SAPs meant that poor developing countries had to prioritize running a current account surplus and building foreign exchange reserves over Government expenditures, which had to be reduced, particularly in the social sectors.

(l) Other reserves