ABSTRACT
At the end of September 2005, a total of reserves held by ten East Asian economies1 stood at $2485 billion, up from a little over 1 trillion five years earlier (see Table 5.1). The reserve increase has been the result of sterilizing the bulk of the surpluses on the current as well as capital account. These economies have been piling up since 1999. All of the ten economies have been running sizeable amounts of current account surpluses (Table 5.2). On top of these imbalances some of East Asia’s emerging economies, notably China, saw swelling of capital inflows, causing a sharp increase in their capital account surpluses as well.
