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

Securities Times Reporter He Jueyuan

Since February, China’s foreign exchange market has remained active, with enterprises and other entities showing a steady decline in willingness to settle foreign exchange, while demand for foreign exchange purchases remains stable. Overall market expectations are steady. Data released by the State Administration of Foreign Exchange on March 16 show that in February, the total foreign exchange market trading volume was $2.6 trillion. Cross-border receipts and payments by enterprises, individuals, and other non-bank sectors totaled $1.2 trillion. Excluding the impact of the Spring Festival holiday, the average daily month-on-month growth was 2% for foreign exchange settlement and 12% for foreign exchange purchase.

Looking at supply and demand in the foreign exchange market, banks settled $206.4 billion and sold $163.6 billion in foreign exchange in February, resulting in a bank foreign exchange settlement and sales surplus of $42.8 billion, down 46% month-on-month. Li Bin, Deputy Director and spokesperson of the State Administration of Foreign Exchange, previously stated that at the end of the year and beginning of the new 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 relatively in equilibrium.

(Edited by: He Chong)

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