BEIJING: Chinese banks sold more foreign currency than they bought for clients in December 2011, the second monthly "deficit" in a row, figures from the State Administration of Foreign Exchange (SAFE) showed on Saturday.
Banks' over-the-counter foreign exchange transactions have contributed to China's huge reserve expansion in recent years as exporters and investors sell dollars to banks which, in turn, sell most of the dollars to the central bank in the interbank market.
SAFE said that Chinese banks bought $142.5 billion over their counters in December 2011, but sold $157.8 billion, the $15.3 billion deficit being the second since monthly data began to be published in January 2010.
In November 2011, Chinese banks sold $800 million more foreign currency than they bought on behalf of clients.
Chinese banks bought a total of $1.60 trillion in foreign currency throughout 2011, and sold $1.23 trillion, resulting in a surplus of $367.8 billion.
China has foreign reserves of about $3.2 trillion, the biggest in the world. Analysts estimate two-thirds are denominated in dollars, about 25 percent in euros and the balance in other instruments.
The monthly foreign exchange purchase data published by the central bank showed dollar selling in October, November, and December, in a sign of capital outflows.
Comments
Comments are closed for this article.