China still buying record amounts of U.S. bonds: report

Mon May 25, 2009 5:38am EDT

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TOKYO (Reuters) - China's official foreign exchange manager is still buying record amounts of U.S. government bonds, in spite of Beijing's increasingly vocal fear of a dollar collapse, the Financial Times reported.

In a story on its website, the FT quoted Chinese and western officials in Beijing as saying China was caught in a "dollar trap."

The newspaper said China had little choice but to keep pouring the bulk of its growing reserves into U.S. Treasuries, which remains the only market big enough and liquid enough to support its huge purchases.

The dollar index, which measures the dollar's value against a basket of six major currencies, hit a five-month low late last week, hurt by concerns that U.S. government debt may lose its AAA rating.


http://www.reuters.com/article/newsOne/idUSTRE54O15P20090525