Yuan forex funds snap decline

Source: Xinhua | 2017-10-20

THE central bank’s yuan outstanding for foreign exchange rose in September, snapping a 22-month decline, according to figures released yesterday.

The funds increased by 850 million yuan (US$129 million) from August to 21.51 trillion yuan, the People’s Bank of China said.

An increase usually signals eased capital flight pressure, while a decrease can indicate higher pressure.

Analysts attributed September’s increase partly to a stronger yuan. The central parity rate of the yuan once strengthened to 6.4997 against the US dollar last month, breaking the psychologically important 6.5 barrier for the first time since May 2016.

The country’s forex reserves rose for the eighth month in a row in September as pressure from capital outflow eased, central bank data showed last week. Forex reserves totaled US$3.1085 trillion at the end of September, increasing US$16.98 billion from a month earlier.