Forex data show capital outflows
Source: Bloomberg News |
August 15, 2012, Wednesday
|
Print Edition
Print Edition
CHINA'S financial institutions sold a net 3.8 billion yuan (US$600 million) of foreign currency in July, suggesting capital outflows after economic growth slowed to a three-year low.
Yuan positions at financial institutions accumulated from foreign-exchange purchases stood at 25.658 trillion yuan at the end of July, down from 25.661 trillion yuan in June, the People's Bank of China data showed yesterday.
The data help explain "tightness" in the interbank market and add to arguments for a cut in banks' reserve requirements, said Dariusz Kowalczyk, a Hong Kong-based economist at Credit Agricole CIB. The central bank and foreign-exchange regulator played down risks of an exodus of funds after the country posted a record US$71.4 billion capital-account deficit in the April-June quarter.
The figures suggest the PBOC may have intervened in support of the yuan last month for the first time since April, which is "very unusual," Kowalczyk said in a note. "Re-acceleration of growth is needed" for Chinese companies to gain confidence in the outlook for the yuan and help it turn around, he said.
Yuan positions at financial institutions accumulated from foreign-exchange purchases stood at 25.658 trillion yuan at the end of July, down from 25.661 trillion yuan in June, the People's Bank of China data showed yesterday.
The data help explain "tightness" in the interbank market and add to arguments for a cut in banks' reserve requirements, said Dariusz Kowalczyk, a Hong Kong-based economist at Credit Agricole CIB. The central bank and foreign-exchange regulator played down risks of an exodus of funds after the country posted a record US$71.4 billion capital-account deficit in the April-June quarter.
The figures suggest the PBOC may have intervened in support of the yuan last month for the first time since April, which is "very unusual," Kowalczyk said in a note. "Re-acceleration of growth is needed" for Chinese companies to gain confidence in the outlook for the yuan and help it turn around, he said.
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