The central bank meanwhile sold dollars on the national foreign exchange market to prevent the Chinese yuan from falling because of bearish trade data and a tumbling Japanese yen.

China has the world's second largest trove of foreign exchange reserves after Japan as a result of swelling trade surpluses and huge foreign investment inflows. Over the past several years, the central bank had bought large volumes of dollars to keep the yuan from appreciating, adding to the reserves. But the Asian crisis has cut the growth of China's exports.

Investment from the region, the most important source of overseas finance, also has dried up. In 1997, China's reserves surged by $34.9 billion to reach $139.9 billion at the end of the year. According to Friday's figures, they grew by just $1.01 billion in the first five monthsof this year. At end-March the reserves were at $140.6 billion, earlier figures showed.

Traders in Shanghai said the People's Bank of China, the central bank, intervened in the foreign exchange market for the second time this week to hold up the yuan. The bank would continue to support the yuan at above the key 8.2800 level, they said.

"The central bank bought whenever the yuan approached the key 8.2800 level," one dealer said. The bank has been defending the 8.2800 level but interventions were rare in the past few months, dealers said. On Monday, the central bank bought the yuan for what dealers said was the first time in months after the local currency hit a six-month closing low of 8.2805 last week.

The central bank declined to comment on Friday's intervention. The Shanghai-based market, the China Foreign Exchange Trade System, does not post trading volumes. The Chinese yuan ended Friday at 8.2799 against Thursday's 8.2796. "The yuan was still under the pressure of China's slowing exports," anotherdealer said.

China's central bank governor, Dai Xianglong, warned on Tuesday a sliding yen was harming Chinese exports and foreign capital inflows. He urged Tokyo to take action to shore up its currency. Dai's call was repeated on Thursday by a Chinese government spokesman, who urged Japan to show "courage and wisdom" to halt the yen's slide. But the spokesman insisted China's policy of not devaluing its currency remained unchanged.

China recorded a trade surplus of $18.53 billion in the January-May period. But export growth of 8.6 per cent during the period compared with 20.9 per cent growth for the whole of last year. Worryingly, exports declined in the month of May for the first time in 22 months.

India's forex level only $ 28 billion

MUMBAI: The foreign exchange reserves of India were estimated at $ 28 billion as on June 1 this year. Out of this, foreign currency reserves account for $ 25 billion and the balance gold and special drawing rights. "At this level, reserves are equivalent toseven months, 25 months of import debt service obligations taken together," said a Reserve Bank of India statement.

However, the foreign exchange inflow has slowed down of late. Foreign institutional investors (FIIs) have been pulling out funds from the Indian market. FIIs took out Rs 510 cror in June first week and over Rs 800 crore in May.