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SAFE News
  • Index number:
    000014453-2020-0053
  • Dispatch date:
    2020-04-17
  • Publish organization:
    State Administration of Foreign Exchange
  • Exchange Reference number:
  • Name:
    SAFE Releases Data on Foreign Exchange Settlement and Sales by Banks and Data on Cross-border Receipts and Payments by Non-banking Sectors in March 2020
SAFE Releases Data on Foreign Exchange Settlement and Sales by Banks and Data on Cross-border Receipts and Payments by Non-banking Sectors in March 2020

       As shown in the statistics of the StateAdministration of Foreign Exchange (SAFE), in March 2020, the amount of foreign exchange settlementand sales by banks was RMB 1388.8 billion and RMB 1258.4 billion, respectively, with a settlement of RMB 130.5 billion. In the US dollartermsthe amount of foreign exchange settlement andsales by banks was USD 198.1 billion and USD 179.5 billion, respectively, with a settlement of USD 18.6 billion. In particular, the amount of foreign exchangesettlement and sales by banks for customers was RMB 1104.3 billion and RMB 1022.7 billion, respectively, with a settlement of RMB 81.6 billion; the amount of foreign exchangesettlement and sales for banks themselves was RMB 284.5 billion and RMB 235.7 billion, respectively, with a settlement of RMB 48.8 billion. During the period, newly signed contract amount of forward foreign exchange settlement and sales was RMB 225 billion and RMB 108.4 billion, respectively, with a net newly signedcontract amountof forward foreign exchange settlement of RMB 116.5 billion. At the end of March, outstanding amount of forward foreign exchange settlement and sales by the end of the current period was RMB 633.3 billion and RMB 477.7 billion, respectively, with a net outstanding amount of forward foreign exchange settlement of RMB 155.5 billion; the net Delta exposure ofoutstanding options was RMB -267.4 billion.

        During January to March 2020, the accumulative amount of foreign exchangesettlement and sales by banks was RMB 3429.8 billion and RMB 3156.8 billion, with an accumulative settlement ofRMB 273 billion. In the US dollar terms, the accumulative amount of foreign exchangesettlement and sales by banks was USD 491.5 billion and USD 452.5 billion, with an accumulative settlement ofUSD 39.1 billion. In particular, the accumulative amount offoreign exchange settlement and sales by banks for customers was RMB 2787.2 billion and RMB 2644 billion, respectively, with an accumulativesettlement of RMB 143.2 billion; the accumulative amount of foreign exchangesettlement and sales for banks themselves was RMB 642.6 billion and RMB 512.9 billion, respectively, with an accumulativesettlement of RMB 129.8 billion. During the period, newly signed contract amountof forward foreign exchange settlement and sales was RMB 482.8 billion and RMB 193.9 billion, respectively, with a net newlysigned contract amount of forward foreign exchange settlement of  RMB 288.8 billion.

InMarch 2020, the amount of cross-border receiptsand payments by non-bankingsectors was RMB 2424.8 billion and RMB 2759.4 billion, respectively, with a deficit of RMB 334.6 billion.DuringJanuary to March 2020, the accumulative amount of cross-border receipts and paymentsby non-banking sectorswas RMB 6389.4 billion and RMB 6605.8 billion, respectively, with an accumulative deficit of RMB 216.5 billion.

In the US dollar terms, in March 2020, the amount of cross-border receiptsand payments by non-bankingsectors was USD 345.8 billion and USD 393.5 billion, respectively, with a deficit of USD 47.7 billion.DuringJanuary to March 2020, the accumulative amount of cross-border receipts and paymentsby non-banking sectorswas USD 915.9 billion and USD 946.7 billion, respectively, with an accumulative deficit of USD 30.7 billion.

In addition, the State Administration of ForeignExchange revised the data on foreign exchange settlement and sales by banks anddata on cross-border receipts and payments by non-banking sectors in January andFebruary 2020 based on the latest data, and released it through the “Data andStatistics” section of the official website of the State Administration ofForeign Exchange.

 


 

Addendum: Glossaryand relevant definitions

Balance of payments(BOP) refers to all economic transactionsbetween residents and non-residents.

Foreignexchange settlement and sales by banks refers to settlement and sale transaction that bank executes for customersand for the banks themselves, including statistic data onsettlements of forward contracts for foreign exchange settlementand sales and the exercises of option, and excludingthe transactions in the interbank foreign exchange market. The statistic reporting date of Foreign exchangesettlement and sales by banks should be the trade day of theForeignexchange settlement and sales transaction. By definition, foreignexchange settlement means foreign exchange holders sell foreignexchange to designated foreign exchange bank, and foreignexchange sales means designated bank sells foreign exchange to foreign exchange buyers. The net position of foreign exchange settlement andforeign exchange sales could be position squared throughtransactions on the inter-bank foreign exchange market, and it is one ofthe major contributors to the countrysforeign exchange reserve fluctuation, though it is not equal to netchange in foreign exchange reserves during the same period

Unlikethe principle of balance-of-payments statistics, which cover the transactionsbetween residents and non-residents, foreign exchange settlement and sales bybanks only cover transactions of RMB and foreign currencies between banks and customers or on banks for themselves.

Thenewly signed contract amount of forward foreign exchange settlement and sales refers to the binding forward contract between designated foreignexchange bank and client that predetermines foreign exchange currency, amount,exchange rate and tenor which to be executed upon maturity. Thenewly signed forward contract enables corporate to lock inadvance the exchange rate for the purchase or sale of a currency on a futuredate to manage relevant foreign exchange risk arising fromRMB volatility. In general, bank will hedge its foreign exchange risk exposures arise from the newly signed forward contract in the Interbank foreign exchange market. For example,when bank has net foreign exchange long position, bankwill short the equivalent amount of foreign exchange in the Interbank foreignexchange market in advance, or vice versa. Therefore, the newly signedcontract amount of forward foreign exchange settlement and sales is also one of contributors to China’s foreign exchange reserve fluctuation.

Theunwind amount of forward foreign exchange settlement and sales refers to, where client is unable to perform the original forwardcontract due to change in its real demand, client to fully or partially closeits forward position by executing another deal with opposite direction to theoriginal contract.

Therolling amount of forward foreign exchange settlement and sales refers to client to adjust the settlement date of original contract dueto change in its real demand.

Theoutstanding amount of forward foreign exchange settlement and sales by the endof the current period refers to the total amount of forwardcontracts accumulated from all non-matured forward contracts with client. Thenewly signed contractamount and the outstanding amount should satisfy the equationthat: theoutstanding amount of forward foreign exchange settlement and sales by the endof the current period = theoutstanding amount of forward foreign exchange settlement and sales at the endof the previous period + the newly signed contract amount of forward foreignexchange settlement and sales for the period - settlements of forwardcontracts for foreign exchange settlement and sales for the period - the unwindamount of forward foreign exchange settlement and sales for the period.

The net Deltaexposure of outstanding options refers to the implied foreignexchange spot risk exposure from outstanding option contracts that bank executedwith client. Bank shall hedge such risk in the foreign exchange market for risk management during deal life cycle.

The cross-borderreceipts and payments bynon-banking sectors refers to the receipts andpayments between domestic non-banking sectors (including institutional and individual residents)and non-residentsthrough domestic banks, excluding receipts and payments in cash. In particular,the statisticsincludescross-border receipts and payments between non-banking sectors andnon-residents through domestic banks (including RMB and foreign currency), and domesticreceipts and payments between non-banking sectors and non-residents throughdomestic banks (temporarily excluding domestic receipts and payments in RMBbetween individual residents and non-resident individuals). Data are collected whencustomers conduct receipts and payments with non-resident counterparties atdomestic banks. Specifically, the receipts refer to the capitalof non-bankingsectors received fromnon-residents via domestic banks; the payments refer to the capitalof non-bankingsectors paid to non-residents via domestic banks.

The cross-border receiptsand payments by non-banking sectors is based on cash basis, different from the accrual basis required by the Balance of Payments Statistics. The statistics merely reflects the cash flows between non-bankingsectors and non-residents and does not include bartertransactions or transactions with non-residents conducted by the banks themselves. Therefore, the scope of the statistics is narrowerthan that of the Balance of Payments Statistics.

The English translation may only be used as a reference. In case a different interpretation of the translated information contained in this website arises, the original Chinese shall prevail.

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