Chinese banks post net forex purchase

Source: Xinhua | 2018-06-20

CHINESE commercial banks continued to see a net foreign exchange purchase in May and cross-border capital flows remained basically stable, the country’s forex regulator said yesterday.

Chinese lenders bought US$172.6 billion worth of foreign currencies and sold US$153.2 billion worth last month, resulting in a net purchase of US$19.4 billion, the State Administration of Foreign Exchange said in a statement.

In April, the banks recorded a net forex purchase of US$10.6 billion, marking the first net forex purchase since December 2017.

The SAFE attributed the net purchase to the decisions of businesses and individuals to adjust their currency-holding structure amid stable expectations of the foreign exchange market.

Although some emerging economies have been facing pressure from capital outflows and currency depreciation since May, the Chinese economy has maintained a stable and improving trend, which effectively stabilized market expectations and offered fundamental support for the forex market, a SAFE spokesperson noted in a separate statement.