BEIJING, Jan. 9 -- The foreign exchange regulator said it would abolish foreign exchange quota limits for overseas investment as one of its key tasks in 2006.

    It also said it planned to explore new ways of using China¡¯s foreign exchange reserves and broadening their investment scope. Most of the country¡¯s foreign exchange reserves, which hit US$769 billion by the end of last September, are invested in U.S. Treasuries.

    ¡°We will abolish foreign exchange quota limits for outbound investment to give more support to companies investing overseas,¡± the State Administration of Foreign Exchange said in a statement on its Web site, issued during an annual work meeting.

    The move will offer a boon to domestic firms as they seek to strike out onto the world stage and help the country to offset a rapid accumulation of foreign exchange reserves.

    The foreign exchange regulator pledged to deepen currency reform by working toward capital account convertibility and broadening the channels for capital to flow out of the country.

    It also reiterated the government¡¯s goal of reducing China¡¯s balance of payments surplus, saying it aimed to promote a balanced international payments position.

    Improvements would be made to the management of the country¡¯s recently introduced foreign exchange regime, it said.

    It would also step up monitoring of capital inflows into the country to safeguard financial stability, it said. Enditem

(Source: Shenzhen Daily/Agencies)