Free Trial

MNI POLICY: China Current Account to Continue A Surplus: SAFE

MNI (Beijing)
     BEIJING (MNI) - China's current account may continue a surplus in the first
quarter on exports of goods and services remaining strong, the State
Administration of Foreign Exchange (SAFE) said. Here are some points noted by
MNI from a briefing by spokeswoman Wang Chunying on Thursday.
     - Current account is likely to remain in a reasonable range and the capital
account will be balanced as outbound investments, including direct investment,
securities investment and loans, increase.
     - An expectation of a more stable yuan, helped by good economic
fundamentals, capital inflow and improving trade talks with the U.S., led to a
decline in net sales of FX by banks for their clients: CNY16.6 billion from
CNY102.3 billion in February, while purchases of FX forward contracts stayed
positive for the third month at CNY122.5billion. 
     -The countercyclical policies adopted this year played a positive role in
bolstering the economy and the FX market has operated smoothly.
     -The flexibility of the yuan's exchange rate will be enhanced to absorb the
impacts of opening up securities market. There is still large potential for
foreign capital in the domestic securities market, where it takes up as little
as 2% in bond and equities combined.
     -SAFE will keep a two-way opening-up of FX market, satisfying both legal
outbound investment by domestic companies and foreign investors' demand. China
will further expand the range of qualified investors to push forward the opening
up of its capital account.
     -SAFE will introduce securities and mutual fund companies into the FX
market and enrich FX derivative instruments to facilitate hedging in the
interbank bond market.
--MNI Beijing Bureau; +86 10 8532 5998; email: william.bi@mni-news.com
--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com
[TOPICS: MAQDS$,M$A$$$,M$Q$$$,MI$$$$,MBQ$$$]

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.