China central bank’s forex sales up in July

Xinhua, BEIJING: China’s central bank saw its yuan funds outstanding for foreign exchange fall 190.5 billion yuan (28.6 billion U.S. dollars) to 23.4 trillion yuan in July, official data showed yesterday.

The drop, more than the 97.7 billion yuan in June, was the ninth consecutive monthly decline.
As the Chinese currency is not freely convertible under the capital account, the central bank has to purchase foreign currency generated by China’s trade surplus and foreign investment in the country, adding funds to the money market.
Such funds are an important indicator for foreign capital flow in and out of China as well as domestic yuan liquidity.
Concerns about capital outflows had been on the rise as the economy slowed, and the Chinese currency 
had fallen since China revamped its forex mechanism last year.

China central banks forex sales up in July

Xinhua, BEIJING: Chinas central bank saw its yuan funds outstanding for foreign exchange fall 190.5 billion yuan (28.6 billion U.S. dollars) to 23.4 trillion yuan in July, official data showed yesterday. The drop, more than the 97.7 billion yuan in June, was the ninth consecutive monthly decline. As the Chinese currency is not freely convertible under the capital account, the central bank has to purchase foreign currency generated by Chinas trade surplus and foreign investment in the country, adding funds to the money market. Such funds are an important indicator for foreign capital flow in and out of China as well as domestic yuan liquidity. Concerns about capital outflows had been on the rise as the economy slowed, and the Chinese currency had fallen since China revamped its forex mechanism last year.