BEIJING — Pressure on China’s cross-border capital outflows eased during the first three quarters of 2016, an official said on Oct 21.
The supply and demand of foreign currencies in China have become more balanced since the start of the year, Wang Chunying, spokesperson of the State Administration of Foreign Exchange (SAFE), said at a press conference.
Chinese banks saw a deficit of $69.6 billion foreign exchange sales and purchases in the third quarter, up from $49 billion in the second, but much lower than the $124.8 billion in the first, according to new data from SAFE.
The narrowed forex sales/purchase deficit in the second and third quarters reflected an easing of pressure on cross-border capital withdrawal, Wang said.
She attributed the increase in the sales/purchase deficit in the third quarter to seasonal factors, as summer vacation and the period before the National Day holiday are peak times for purchasing foreign currencies as residents prepare for studies abroad or overseas travel.
Disregarding seasonal factors, the forex sales/purchase deficit stood at $48.2 billion during the July-September period, Wang added.
Cross-border flows will remain “basically stable” in the future, she predicted, citing China’s relatively fast economic growth, sound financial system, good fiscal balance, continuous current account surpluses and ample foreign exchange reserves as buffers against shocks.