China sees lower forex deficit in Q1

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01:04

China’s foreign exchange regulator on Thursday said that net foreign exchange sales by Chinese banks dropped significantly in the first quarter of 2018, as cross-border capital flows stayed balanced and stable.

Chinese commercial banks bought 434.2 billion US dollars worth of foreign currencies and sold 452.5 billion dollars worth in the quarter. That resulted in net sales of 18.3 billion dollars – a 55-percent drop year-on-year.

Forex supply and demand have been balanced so far this year. Market entities were more willing to borrow forex loans, instead of buying foreign currencies from banks, said Wang Chunying, spokesperson for the State Administration of Foreign Exchange (SAFE), during a press conference.

In line with the forex sales data, China's forex reserves rose to 3.14 trillion US dollars by the end of March. That is 2.9 billion US dollars higher than three months ago.

According to Wang, the impact of trade frictions between the US and China has been within a controllable range.

“China's current account has been basically balanced in recent years. The country had a current account surplus equal to 1.3 percent of its GDP in 2017. And China's current account will continue to move towards equilibrium in the future," Wang explained.