China’s net forex sales slow in April

Source: Xinhua | 2017-05-16

NET foreign exchange sales by China’s central bank and financial institutions continued to slow in April in a sign of easing capital outflows, official data showed yesterday.

China sold 42 billion yuan (US$6.1 billion) worth of foreign exchange in April, down from 54.7 billion yuan in March and 58.1 billion yuan in February, according to data from the People’s Bank of China.

As the yuan is not freely convertible under the capital account, the central bank has to purchase foreign currencies generated by China’s trade surplus and foreign investment in the country, adding funds to the money market.

The narrowing decline indicated easing pressure from capital flight as the Chinese economy firms up and the yuan stabilizes against the US dollar.

Official data showed China foreign exchange reserves climbing to US$3.0295 trillion at the end of April from US$3.0091 trillion a month earlier.

This was the first time since June 2014 the forex reserves expanded for three consecutive months.