China in net forex purchase in Oct, reverses 3 mths of heavy sales
China‘s central bank and commercial banks bought a net 12.9 billion yuan ($2.02 billion) worth of foreign exchange in October, data showed on Sunday, stemming heavy sales in the previous three months that underlined capital outflows.
The October net buys, which flipped from September’s record net sale of 761.3 billion yuan ($119.45 billion), according to Reuters calculations based on central bank data, came in line with a rise in China’s foreign exchange reserves in October.
Analysts say the government’s efforts to step up monitoring of foreign exchange transactions and a rebound in the stock market may have limited capital outflows, for now.
But the pressure may persist, as the Chinese economy still faces downward pressures and the U.S Federal Reserve is set to raise interest rates at some point, they said.
China’s net forex sales have intensified since July and leapt between August and September, as authorities scrambled to stem the yuan’s slide following the surprise devaluation of Aug. 11.
Source: Reuters – China in net forex purchase in Oct, reverses 3 mths of heavy sales
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