BEIJING — Chinese commercial banks reported a net forex purchase in the first half of the year, the first of its kind in three years, the country’s forex regulator said on July 19.
Chinese lenders bought $928.2 billion of foreign currencies and sold $914.4 billion from January to June, resulting in a net purchase of $13.8 billion, according to Wang Chunying, spokesperson for the State Administration of Foreign Exchange (SAFE).
In the same period last year, banks saw a net forex settlement deficit of $93.8 billion, Wang said at a press conference.
Commenting on the change from deficit to surplus, Wang said it is one of the testimonies 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 January-June period, with a net sales of $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 opening-up deepening and forex market stable in the first half of the year, which is quite remarkable.”
She noted the stable exchange rate of Chinese currency renminbi is another sign of the health of China’s forex market.
The currencies of major developed economies weakened by 2.7 percent against the US 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, 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 the 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 on July 16.