Economic review

Chinese banks record net forex purchase in April

2018-05-18 21:22:00 (Beijing Time)         Xinhua

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Chinese commercial banks recorded a net foreign exchange purchase in April, and forex market supply and demand remained balanced, the country's forex regulator said Friday.

Chinese lenders bought 157.4 billion U.S. dollars worth of foreign currencies and sold 146.7 billion dollars last month, resulting in a net purchase of 10.6 billion dollars, the State Administration of Foreign Exchange (SAFE) said in a statement.

It was the first net forex purchase since December 2017. In March, the banks saw a net forex sale of 9.2 billion dollars.

The forex market supply and demand has been "relatively balanced" recently, a SAFE spokesperson said in a separate statement, noting overall equilibrium in cross-border fund flows.

The spokesperson, who was not identified, attributed the stability to the essential role played by China's economic fundamentals in stabilizing forex market expectations.

Since April, emerging markets have seen increased pressure for capital outflow and currency depreciation, with a more volatile international financial market, a stronger dollar and higher U.S. interest rates, according to the spokesperson.

However, "based on sustained steady operation of the domestic economy, China's forex market will be able to adapt to external changes and maintain reasonable, balanced cross-border capital flows in the future," said the spokesperson.

The Chinese yuan has weakened against the dollar in recent weeks after marked strengthening in the first quarter, but it has continued to strengthen against a basket of currencies.

China's economy expanded 6.8 percent year on year in the first quarter of 2018, above the government's annual target of around 6.5 percent.

Economic activity held largely stable in April, with strong momentum in the industrial sector buffering the impact from slowing retail sales and fixed-asset investment.

In the first four months of the year, Chinese banks saw a net forex sale of 7.6 billion dollars, according to SAFE data.