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Chinese banks’ net forex sales drop further in February

Updated: Mar 16,2017 5:27 PM     Xinhua

BEIJING — Net foreign exchange sales by Chinese banks continued to drop in February signaling a let-up of capital outflow, official data showed on March 16.

Banks bought $108.8 billion worth of foreign currencies and sold $118.9 billion, resulting in net sales of $10.1 billion last month, according to the State Administration of Foreign Exchange (SAFE).

The deficit was down from January’s $19.2 billion and $46.3 billion in December.

There had been rising concerns about capital flight in the second half of 2016, when the economy was facing looming downward pressures and the Chinese yuan was in the middle of a losing streak against the greenback.

But the yuan gradually recovered from its weakness in recent months, as the Chinese economy started 2017 on a firmer footing, indicated by a string of economic data including factory activity, foreign trade and fixed-asset investment.

The yuan’s central parity rate strengthened 253 basis points to 6.8862 against the US dollar on March 16.