Gold purchases ruled out to diversify forex reserves

Expectations of stronger yuan will intensify this year, official says

BEIJING - The government is unlikely to buy large amounts of gold as a means to diversify its $2.39 trillion worth foreign exchange reserves, a senior official said, while stressing that "the US treasuries market is very important for China".

But the official cast no light on the prospects for the renminbi, which has been traded at around 6.83 per dollar since mid-2008, a move some countries speculate keeps the value of renminbi "artificially low" and helps Chinese exporters weather the global credit crunch.