BEIJING,Jan. 15 (Xinhuanet) -- China's foreign exchange reserves amounted to 818.9 billion U.S. dollars by the end of 2005, up 34.3 percent year on year, the central bank said on Sunday.

    Last year, China's foreign exchange reserves increased by 208.9billion dollars, or 2.2 billion dollars more than the increase in 2004, according to figures published by the People's Bank of China, the central bank.

    In late December 2005, the exchange rate of U.S. dollar against Chinese currency, the yuan, was one to 8.0702, the bank said.

    Industry sources predicted that in 2006 China's foreign exchange policies will be more flexible, but the exchange rate will remain basically stable.

    Besides, efforts will be focused on trying to achieve an international balance of payment. It is estimated that China's trade surplus in 2005 would reach 100 billion U.S. dollars.

    The State Administration of Foreign Exchange will face a tough task in how to handle the increasing huge reserves of foreign exchange, the sources said. Enditem