Bernanke says China likely to keep buying US debt

WASHINGTON Tue Dec 15, 2009 4:01pm EST

WASHINGTON Dec 15 (Reuters) - Federal Reserve Chairman Ben Bernanke, in a response to a lawmaker's questions made public on Tuesday, said China was likely to continue to buy U.S. assets as long as it keeps its currency closely tied to the U.S. dollar.

"Absent a policy shift in China that entails a discontinuation of official operations to resist upward pressure on the country's currency, China will continue to accumulate external assets and thus likely will continue to invest in U.S. assets," Bernanke said in written responses to questions from Senator Jim Bunning of Kentucky that were posted on the senator's website.

"Foreign countries, including China, find (U.S.) Treasury securities attractive because the market for U.S. government securities is one of the deepest and most liquid markets in the world and because the U.S. dollar is widely accepted as the premier reserve currency," he said. (Reporting by Mark Felsenthal and Pedro da Costa; Editing by Dan Grebler)

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