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(Z1) Off Lows, But Remains Weak


Still Vulnerable


Bullish Price Sequence

     BEIJING (MNI) - The People's Bank of China's foreign exchange purchase
position rose in November for the third straight month, reflecting a relatively
balanced flow of foreign exchange supply and demand.
     The PBOC's foreign-exchange position rose CNY2.369 billion to CNY21.52
trillion in November.  The November rise was slightly larger than the CNY2.098
billion increase in October, according to data from the PBOC released on
     The forex purchase position is viewed as an indicator of Chinese capital
flows. The larger the increase, the larger capital inflows, and vice versa.  
     The PBOC foreign reserves increased $10.06 billion in November.
     "The forex purchase position number reflects a very balanced supply and
demand, as in the past months," a Shanghai-based forex trader at a commercial
bank told MNI. "Recently, the importance of the forex purchase position has
fallen, and I do not pay too much attention to it." 
     As long as the PBOC does not intervene much in the foreign exchange market
and capital flows remain balanced, the foreign exchange purchase position will
continue to fluctuate in a narrow range.
--MNI Beijing Bureau; +86 10 85325998; email:
--MNI BEIJING Bureau; +1 202-371-2121; email:
[TOPICS: MAQDS$,M$A$$$,M$Q$$$]