China records biggest forex sales in August

GMT 19:23 2015 Monday ,14 September

Arab Today, arab today China records biggest forex sales in August

china yuan
Beijing - XINHUA

Chinese financial institutions' new yuan funds outstanding for foreign exchange witnessed a record dive of 723.84 billion yuan (113.63 billion U.S. dollars) to 28.18 trillion yuan last month, data released Monday showed.

The central bank's new yuan outstanding for foreign exchange totaled 26.1 trillion yuan in August, also a landmark slump of 318.35 billion yuan month on month, according to data released by the People's Bank of China (PBOC).

The PBOC releases two sets of data on yuan funds for foreign exchange every month by differentiating forex purchases by the central bank and commercial banks.

Minsheng Securities said the sharp monthly drop shows a more severe situation for China's capital outflow.

The funds are an important indicator for foreign capital flow in and out of China as well as domestic yuan liquidity.

China is battling a property downturn, industrial overcapacity, sluggish demand and struggling exports, which dragged growth down to 7 percent for the first half (H1) of the year.

Data on Sunday showed China's value-added industrial output expanded 6.1 percent year on year in August, up slightly from 6 percent in July but still fell short of market expectations.

On top of that, fresh pressure from capital market volatility, currency devaluation in emerging markets, and slumping global commodity prices are further muddying growth prospects that fueled worries of foreign capital outflows.

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