MNI DATA IMPACT:China May Capital Outflow Slows, FX Data Shows

     BEIJING (MNI) - Chinese banks made net purchases of foreign exchange for

their clients for the first time in four months in May, suggesting capital

outflows have eased.

     Here are highlights from data released by the State Administration of

Foreign Exchange (SAFE) on Thursday:

     -- Banks purchased net CNY31.8 billion equivalent FX on behalf of clients,

reversing the net selling of CNY53.1 billion FX in April. Greater net sales

correspond to larger FX outflow.

     -- Banks' net purchases of FX forward contracts totaled CNY131.2 billion,

compared with CNY96.3 billion in April, suggesting market participants are

betting on a stronger yuan in the long term.

     -- Banks' net FX purchasing, including both transactions on behalf of

clients and banks' proprietary trading, totaled CNY42.5 billion, compared to

CNY73.7 billion of net selling in April.- The yuan weakened 2.46% against the

U.S. dollar last month, following April's 0.24% decline.

--MNI Beijing Bureau; +86 (10) 8532-5998; email: wanxia.lin@marketnews.com

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

[TOPICS: MAQDS$,MAUDR$,MAUDS$,M$A$$$,M$Q$$$,M$U$$$]