Monday, March 14, 2016

In February the Central Bank foreign exchange decline substantially narrowed

And signs that China's capital outflow there have been signs of improvement.

People's Bank of China (PBoC), updated on March 14, "monetary authorities balance sheet" shows that in February the Central Bank caliber Exchange share decreased by 227.946 billion yuan, to 23.98 trillion yuan, and four consecutive months of decline.

Although still declining, but compared to January, in February foreign exchange decline slows down a lot. In January the Central Bank bore down 644.5 billion yuan, creating the second largest drop in history, second only to December fell 708.2 billion yuan last year.

This change is consistent with the February foreign exchange reserves data released earlier. Foreign currency reserve reduced by $ 28.572 billion to $ 3,202,321,000,000 in February, better than the decline of 40.9 billion dollar market is expected.

Throughout February, Yuan rate against the dollar to rise slightly by 64 basis points, the spot rate rose 317 basis points. Into March, the Yuan rally and regained all the lost ground this year.

Foreign Exchange is when a Central Bank buys dollars and other foreign currency assets and put in the corresponding national currency. Because the Yuan is not a freely convertible currency, foreign trade enterprises and residents after the availability of foreign exchange, Exchange into renminbi needs to use. Used to be subject to compulsory settlement system and hot money inflows, China's foreign exchange increased. As the dollar strengthened and after implementation of the wishes of the authority in the settlement of foreign exchange, foreign exchange began to decline. Mid session review ten issues see Wan Bao disputes

In previous years, increasing foreign exchange are regarded as the Central Bank's money tools, and after the foreign exchange shrank, the Central Bank may need to be supplemented through other means such as reducing inject liquidity.

It is worth mentioning that, starting from this year, central banks will the financial institutions ' credit in the income and expenditure account "foreign exchange trading" adjust for "Central Bank Exchange share" occupied financial institutions are no longer included in foreign exchange trading in Renminbi.

Credit's Central Bank, a move interpreted as a statement of income and expenditure account optimization, designed to guarantee the statistics system of scientific, clear, and concise, and indicators reflect the pure information, point to clear, and avoid misreading the market.

On March 12, the people's Bank of China Governor Zhou xiaochuan and other "financial reform and development" on answering reporters ' questions, Bank senior also responded to include Renminbi exchange rates, capital flight and other problems.

Among them, he made it clear that, in the context of economic globalization, highly globalized financial markets, not surprising, the number of individual stages of capital outflows.

Deputy Central Bank Governor Yi gang said, shedding most of the can be explained by hidden sinks to the people.

Deputy Governor of the Central Bank and the State administration of foreign exchange Pan gongsheng, the Secretary said, the current structure of cross-border capital flows are relatively benign, cross-border capital flows from the perspective of the case for the past few months was restrained, reflecting multiple indicators are shown in the convergence of the foreign exchange market.

Pan gongsheng, said FX 50% reduction in deficit in February than in January, foreign-related balance of payments deficit narrowed in February than in January 50%.

At the press conference, Mr Zhou also did not forget to advise members, there is no need to rush to buy dollars.