SAFE: Foreign Exchange Purchase Demand Remains Basically Stable, Market Expectations Overall Stable

Financial Times Reporter He Jueyuan

Since February, trading in China’s foreign exchange market has remained active. The willingness of enterprises and other entities to settle foreign exchange has slightly decreased, while demand for foreign exchange purchases remains stable. Overall market expectations are steady. According to data released by the State Administration of Foreign Exchange on March 16, the bank’s foreign exchange settlement and sale, as well as foreign-related payments and receipts by banks in February, totaled $2.6 trillion. Non-bank sectors such as enterprises and individuals had cross-border receipts and payments totaling $1.2 trillion. Excluding the impact of the Spring Festival holiday, the daily average month-on-month increases were 2% and 12%, respectively.

In terms of supply and demand in the foreign exchange market, banks settled $206.4 billion and sold $163.6 billion in February, resulting in a bank foreign exchange surplus of $42.8 billion, a decrease of 46% month-on-month. Li Bin, Deputy Director and spokesperson of the State Administration of Foreign Exchange, previously stated that at the end and beginning of the year, enterprises experienced rapid increases in receipts and settlement of foreign exchange. As demand gradually releases, growth in enterprise receipts and settlement will slow down.

“Since February, international geopolitical conflicts have intensified, and fluctuations in the international financial markets have increased. Overall, China’s foreign exchange market has operated steadily,” Li Bin said. Currently, China’s foreign-related economy is developing smoothly, and market expectations remain generally stable. Since March, cross-border capital inflows and outflows have been basically balanced, with supply and demand in relatively equilibrium.