Capital flows out of China slowing

AFP, BEIJING: The flood of billions of dollars out of China slowed dramatically in the second quarter, official figures showed Thursday, despite the yuan's persistent weakness making it less attractive to hold.
"Cross-border capital outflow pressures have gradually eased," Wang Chunying, spokeswoman for the State Administration of Foreign Exchange (SAFE), said at a briefing.
Foreign exchange settlement data showed Chinese banks sold $49.0 billion more in foreign currency than they received between April and June. That "narrowed sharply" from $124.8 billion in the January-March period, she said.
The monthly figures were even more dramatic, with $12.8 billion leaving in June, down from $54.4 billion in January, she added.
Money has been flowing out of China in recent years as its growth has slowed, adding to downward pressure on its currency and making yuan-denominated assets less attractive to hold, in a vicious cycle for the world's second-largest economy.
Authorities have tightened restrictions on cross-border money flows, including capping cash withdrawals overseas using domestic bank cards at 100,000 yuan ($15,000) per year from January and requiring banks to pay a 20 percent deposit on forward sales of foreign exchange to stem speculation.
A forward sale is a commitment to sell at a predetermined price and date.
Chinese firms have embarked on a string of high-profile overseas acquisitions, and Wang insisted that capital was leaving mainly because of "continued expanding overseas investment" by Chinese firms, rather than "foreign capital withdrawing from China".
SWIFT, the global provider of financial messaging services, said this week that the yuan's share of global payments slid to 1.72 percent in June, down from 1.90 percent in May.
But the unit, also known as the renminbi (RMB), remained in sixth place as a world payment currency in June, behind the Canadian dollar, where it has stood since April, SWIFT said.

Capital flows out of China slowing

AFP, BEIJING: The flood of billions of dollars out of China slowed dramatically in the second quarter, official figures showed Thursday, despite the yuans persistent weakness making it less attractive to hold. Cross-border capital outflow pressures have gradually eased, Wang Chunying, spokeswoman for the State Administration of Foreign Exchange (SAFE), said at a briefing. Foreign exchange settlement data showed Chinese banks sold $49.0 billion more in foreign currency than they received between April and June. That narrowed sharply from $124.8 billion in the January-March period, she said. The monthly figures were even more dramatic, with $12.8 billion leaving in June, down from $54.4 billion in January, she added. Money has been flowing out of China in recent years as its growth has slowed, adding to downward pressure on its currency and making yuan-denominated assets less attractive to hold, in a vicious cycle for the worlds second-largest economy. Authorities have tightened restrictions on cross-border money flows, including capping cash withdrawals overseas using domestic bank cards at 100,000 yuan ($15,000) per year from January and requiring banks to pay a 20 percent deposit on forward sales of foreign exchange to stem speculation. A forward sale is a commitment to sell at a predetermined price and date. Chinese firms have embarked on a string of high-profile overseas acquisitions, and Wang insisted that capital was leaving mainly because of continued expanding overseas investment by Chinese firms, rather than foreign capital withdrawing from China. SWIFT, the global provider of financial messaging services, said this week that the yuans share of global payments slid to 1.72 percent in June, down from 1.90 percent in May. But the unit, also known as the renminbi (RMB), remained in sixth place as a world payment currency in June, behind the Canadian dollar, where it has stood since April, SWIFT said.