China's forex reserves rise, but growth slows

SAN FRANCISCO (MarketWatch) -- China's foreign exchange reserves rose 16% in the first quarter from a year ago, but the pace from December slowed, media reports quoting central bank statistics said Saturday.

The country's foreign currency balances, the largest in the world, rose to $1.9537 trillion at the end of March, according to statistics released by the People's Bank of China on its Web site.

The increase was $272 billion higher than March 2008 and $7.7 billion more than in December. The gain from the end of last year was smaller than previous quarterly gains and likely reflected the global financial crisis' hit to exports, analysts said. In the September-December period, reserves increased by $40.4 billion.

China sparked a minor furor in March when officials suggested the U.S. dollar be replaced as an international reserve currency.

The country, the largest foreign holder of U.S. Treasurys, has also said it's worried about the safety of its holdings as the U.S. pursues uncharted monetary policies to jumpstart the U.S. economy.