Chinese banks see net forex sales in March

Chinese commercial banks continued to see net foreign exchange sales last month but the volume has narrowed from that in February as cross-border capital flows remained basically stable, the country's forex regulator said Thursday.

[File photo: IC]

Chinese lenders bought around 151.3 billion U.S. dollars worth of foreign currencies and sold 157.5 billion dollars worth last month, resulting in net sales of 6.1 billion dollars, the State Administration of Foreign Exchange (SAFE) said in a statement.

The data narrowed from the 15 billion dollars deficit seen in February.

In the first quarter, the banks recorded a net forex sales of 9.1 billion dollars, the data showed.

The Q1 deficit was down 50 percent from that in the same period last year. On a monthly average basis, the data narrowed 74 percent from that seen over the latter half of 2018, according to SAFE spokesperson Wang Chunying.

"Cross-border capital flows have shown positive changes in 2019," Wang noted, citing the strength of the yuan and balanced supply-demand dynamics in the market.

In the first three months, the central parity rate of the yuan strengthened 1.9 percent against the U.S. dollar. It also gained 1.9 percent against a basket of currencies monitored by the China Foreign Exchange Trade System.

On the market outlook, Wang said the current domestic and external environment is conducive to the stable development in the foreign exchange market as China's sound economic fundamentals and opening-up policies will offer a foundation for balanced capital flows.

In addition, progress in China-U.S. trade talks will help stabilize market sentiment, Wang noted.

Earlier data showed China's foreign exchange reserves, a similar measure of capital flow, edged up 0.3 percent from February to 3.0988 trillion dollars by the end of March.

The Chinese economy beat market expectations to expand 6.4 percent year on year in Q1, unchanged from the GDP expansion in the previous quarter, according to the National Bureau of Statistics.