MNI: China Banks Net FX Buyers From Clients In January - SAFE

--SAFE: Bank FX Buying Balanced Cross-Border Capital Flows

     BEIJING (MNI) - China banks were net buyers of foreign exchange from their

clients in January for a second consecutive month, reflecting relatively

balanced cross-border capital flows, according to the latest figures from the

State Administration of Foreign Exchange.

     SAFE said Monday that Chinese banks bought a net CNY14.9 billion from

clients in January, compared with a net purchase of CNY44.5 billion in December.

     "The supply and demand has remained generally balanced at the beginning of

2018," SAFE said on its official website, citing steadily rising forex reserves,

balanced purchasing and selling of forex by banks, and non-bank sectors' surplus

in forex income and expenditures.

     As of the end of January, outstanding foreign reserves stood at $3.16

trillion, an increase of $21.51 billion from last December, according to data

from the People's Bank of China. 

     SAFE also noted personal purchasing of forex from banks increased 11% m/m

in January, reflecting higher demand ahead of the traditional New Year holidays.

     The net position on forex forwards to buy yuan from banks increased CNY73

billion to CNY683.3 billion in January, up for the fifth consecutive month, but

lower than CNY102.2 billion growth in December. The pick-up reflected corporate

satisfaction with the current yuan level, although confidence the currency will

increase further is muted.

     Cross-border capital flows are expected to remain generally stable

considering the two-way fluctuations of the yuan, the domestic economy and and

the markets' more stable expectations on main currencies, SAFE said.  

--MNI Beijing Bureau; +86 10 85325998; email: he.wei@marketnews.com

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

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