Chinese banks' net forex sales narrow 50% in Q1

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Net foreign exchange (forex) sales by Chinese banks narrowed 50 percent year-on-year in the first quarter of this year, and cross-border capital flows remained stable, the country's forex regulator said Thursday.

Banks bought 436.2 billion U.S. dollars' worth of foreign currencies and sold 445.4 billion U.S. dollars' worth, resulting in net sales of 9.1 billion U.S. dollars in the first quarter, down 50 percent from the same period last year, according to Wang Chunying, chief economist of the State Administration of Foreign Exchange (SAFE).

“The renminbi exchange rate was generally stable, the country's cross-border capital flows remained stable, and the forex supply and demand kept basically balanced in the first quarter,” Wang told a press conference.

“The exchange rate for sales edged down, with the forex loans offered by domestic banks increasing slightly…The exchange rate for purchase remained stable, and the current market participants' overall willingness to hold forex was stable.”

Affected by factors like the Spring Festival holiday, monthly forex supply and demand fluctuated, but overall maintained balance, according to Wang. “The net forex purchase recorded 12.1 billion U.S. dollars in January, and February saw the net forex sales of 15 billion U.S. dollars, and the net forex sales in March stood at 6.1 billion U.S. dollars,” she added.

China's forex reserves rose steadily in the first quarter, according to Wang. As of the end of March, the forex reserves stood at about 3.1 trillion U.S. dollars, with an increase of 26 billion U.S. dollars from the end of 2018.

In March, the banks bought 151.3 billion U.S. dollars' worth of foreign currencies and sold 157.5 billion U.S. dollars' worth, with the net forex sales standing at 6.1 billion U.S. dollars, a statement from the SAFE also showed.