US$93b net forex buying
By Feng Jianmin |
March 5, 2013, Tuesday
|
Print Edition
Print Edition
BANKS in China bought a net US$92.6 billion in foreign exchange, more than expected, in January, indicating strong capital inflow and easy liquidity in the near term.
The net amount Chinese banks bought using the yuan in over-the-counter transactions was an increase from US$54.3 billion in December, data from the State Administration of Foreign Exchange showed.
"The data point to an unusually large market demand for the yuan," said Dariusz Kowalczyk, senior economist at Credit Agricole. "This explains ample yuan liquidity onshore in the first several weeks of the year as well as recent central bank's liquidity- draining operations."
In the week ending February 22, the People's Bank of China drained a record-high net 910 billion yuan (US$146 billion) via open market operations.
But Kowalczyk said the PBOC may not aggressively tighten monetary policies, and the yuan may appreciate again on strong market demand once the yen and the euro stabilize against the US dollar.
The net amount Chinese banks bought using the yuan in over-the-counter transactions was an increase from US$54.3 billion in December, data from the State Administration of Foreign Exchange showed.
"The data point to an unusually large market demand for the yuan," said Dariusz Kowalczyk, senior economist at Credit Agricole. "This explains ample yuan liquidity onshore in the first several weeks of the year as well as recent central bank's liquidity- draining operations."
In the week ending February 22, the People's Bank of China drained a record-high net 910 billion yuan (US$146 billion) via open market operations.
But Kowalczyk said the PBOC may not aggressively tighten monetary policies, and the yuan may appreciate again on strong market demand once the yen and the euro stabilize against the US dollar.
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