Forex purchases back in the black
CHINESE commercial banks reported net forex purchases in the first half of the year, the first time in three years, the country’s forex regulator said yesterday.
Chinese lenders bought US$928.2 billion of foreign currencies and sold US$914.4 billion from January to endJune, resulting in a net purchase of US$13.8 billion, according to Wang Chunying, spokesperson for the State Administration of Foreign Exchange.
In the same period last year, banks saw a net forex settlement deficit of US$93.8 billion, Wang told reporters.
Commenting on the change from deficit to surplus, Wang said it is of testimony to the greater steadiness and balance in China’s forex market.
She said Chinese banks had seen continued “great” deficits in forex settlement in the past three years during the JanuaryJune period, with a net sales of US$173.8 billion registered in the first half of 2016.
“External complexity, volatility, and uncertainties have significantly mounted,” Wang said.
“However, China’s economy remained stable with openingup deepening and the forex market stable in the first half of the year, which is quite remarkable.”
She noted the stable exchange rate of the Chinese currency is another sign of the health of China’s forex market.
The currencies of major developed economies weakened by 2.7 percent against the dollar in the first six months, while emerging market currencies shed 7.3 percent, Wang said.
“In contrast, the renminbi’s central parity rate against the dollar dipped 1.2 percent.”
Amid the turbulence
in emerging markets, China has seen solid economic fundamentals, a sound balance of payments, a safe foreign debt ratio and abundant forex reserves, the spokesperson said.
“External impact has been well handled, leaving no major impact on cross-border capital flow,” Wang said.
China’s economy expanded steadily in the first half of 2018, with gross domestic product up 6.8 percent year on year, exceeding the government’s annual growth target of around 6.5 percent, official data showed Monday.