Cross-border capital flows steady in July as demand, supply for forex balanced: SAFE

Source:Global Times Published: 2017/8/16 21:08:40

China's cross-border capital flows remained stable in July, as domestic demand and supply of foreign currencies was "basically balanced," the State Administration of Foreign Exchange (SAFE), China's foreign exchange regulator, said on Wednesday.

A spokesperson for SAFE also pointed to stability in the country's non-banking foreign payment deficit and a consecutive six-month rise in China's foreign reserves.

In July, Chinese banks recorded a deficit of $15.5 billion in foreign exchange settlement and sales, down 26 percent from June, while the deficit for banks' settlement and sales for clients fell 53 percent to $6.3 billion in July, according to the spokesperson.

Such developments at the banks show an improvement in foreign exchange demand and supply in the domestic market in July, compared to the previous two months, the spokesperson said in a statement on the agency's website. 

The deficit for settlement and sales of foreign exchange at non-banking entities also maintained stability in July at $22 billion, the same level as in the previous two months, the statement said.

Also, China's foreign exchange reserves rose in July to $3.08 trillion, up $23.9 billion from June and the sixth straight monthly gain, according to the statement.

Domestic entities' foreign-related payments appeared to be in better order in July. Market share will remain stable as purchase plans for foreign exchange will continue to decline, the SAFE spokesperson said in the statement.

As the trend toward economic stability is getting more obvious, the market expectations are also becoming more stable, and these factors are pushing the improvement in China's foreign exchange status significantly, SAFE said, adding that it expects cross-border capital flows to remain stable in the future as the fundamental aspects of the economy will be better supported.

The effect of the domestic market's widened opening-up will gradually emerge, and those entities with foreign assets and liabilities will tend to be adjusted in a more stable way, SAFE said.

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