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Chinese banks' net forex sales rise in May
Last Updated: 2017-06-19 07:18 | Xinhua
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Net foreign exchange (forex) sales by Chinese banks continued to rise in May but cross-border fund flows remained stable, China's forex regulator said Friday.

Banks bought 129.6 billion U.S. dollars' worth of foreign currency and sold 146.7 billion dollars, resulting in net sales of 17.1 billion dollars last month, up 15 percent from April, according to a statement from the State Administration of Foreign Exchange (SAFE).

The monthly deficit had been rising gradually since February, and the May data were still lower than the 19 billion dollars in January.

SAFE said the country's cross-border fund flows continued to stabilize with a positive outlook, noting that the forex supply and demand remained basically balanced.

In the January-May period, bank net forex sales stood at 72.9 billion dollars, up from 56 billion dollars in the first four months.

There have been rising concerns about capital flight since the second half of 2016, when the economy was facing downward pressure and the Chinese yuan was in the middle of a losing streak against the dollar.

But the yuan has gradually recovered from its weakness as the Chinese economy firmed up in the first quarter of the year, with forecast-beating GDP growth, and the greenback becoming less volatile.

"The market sentiment remains stable currently," the SAFE statement said.

In May, banks saw net forex sales on behalf of individuals and non-bank companies drop 3 percent month on month to 12.4 billion dollars.

Domestic individuals and companies will be more rational in forex purchases and sales as the Chinese economy is better supported to operate in a reasonable growth range and the mechanism for shaping the yuan's central parity rate continues to be improved, according to SAFE.

Measured by the central parity rate, the yuan has appreciated more than 2 percent against the dollar so far this year.

Another indicator of cross-border capital flows, China's forex reserves rose for the fourth month in a row in May to total 3.05 trillion dollars, an increase of 24 billion dollars from a month earlier.

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