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BEIJING (MNI) - Chinese banks sharply increased selling of foreign exchange
on behalf of their clients in November, indicating capital outflows accelerated
under a weakening yuan and concerns over a slowing economy and trade conflicts
with the U.S.
The following are key takeaways from data released by the State
Administration of Foreign Exchange on late Thursday.
--Banks sold net CNY139.4 billion worth of FX on behalf of their clients.
This compared with CNY24.1 billion in October. The number is a key indicator of
capital flows in and out of the country. The greater the net sales number, the
larger the outflow.
--In terms of forward contracts, banks were net forex purchasers on behalf
of their clients in November, suggesting market participants were betting on a
stronger yuan in the longer term. Banks' net purchases of forex forward
contracts totaled CNY31.9 billion, compared with CNY19.1 billion in October.
--Banks' total net forex sales, including both transactions with clients
and banks' proprietary trading desks, rose to net CNY124.1 billion in November
from CNY20.3 billion in October. In Jan-Nov, banks sold net total CNY341.2
billion to clients.
--Bank's net purchases of forex forward contracts in November provided
US$11.2 billion of foreign exchange to meet the market's needs, Wang Chunying,
spokeswoman of SAFE, said in a statement.
--China's forex purchase position on the central bank's balance sheet fell
CNY57.13 billion in November, indicating capital outflow pressure as yuan
--MNI Beijing Bureau; +86 10 8532 5998; email: firstname.lastname@example.org