-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange settlement and sales and banks' foreign-related receipts and payments for customers for May 2019. SAFE Press Spokesperson and Chief Economist Wang Chunying answers media questions on foreign exchange receipts and payments for May 2019. Q: What changes occurred in China’s foreign exchange receipts and payments in May 2019? A: In May, China's foreign exchange receipts and payments remained stable with good momentum, and the operation of the foreign exchange market remained stable. Based on relevant data, firstly, banks’ settlement and sales of foreign exchange registered a surplus. In May, banks’ foreign exchange settlement rose 4% from April, while banks’ foreign exchange sales fell 7%, recording a surplus of USD 6.2 billion. Secondly, the deficit of banks’ foreign-related receipts and payments for customers narrowed. In May, enterprises, individuals and other non-banking sectors recorded a deficit of USD 6 billion in foreign-related receipts and payments, narrowing by 23% month on month. Thirdly, the balance of foreign exchange reserves rebounded to certain extent, reaching USD 3,101 billion at the end of May, an increase of USD 6.1 billion month on month. Market expectations have been stable as a whole since May, with positive changes in cross-border capital flows through major channels. In May, market players’ willingness to settle foreign exchange rose and their willingness to buy foreign exchange remained stable. In particular, the foreign exchange settlement rate that measures the willingness to settle foreign exchange, or the foreign exchange sold by customers to banks as a percentage of their foreign-related foreign exchange income, was 70%, up by 4 percentage points month on month. The foreign exchange sales rate that measures the willingness to buy foreign exchange, or the ratio of foreign exchange purchased by customers from banks to the customer's foreign-related foreign exchange payments was 68%, basically the same month on month. The contracted surplus of forward settlement and sales of foreign exchange was USD 19.2 billion, up by33% month on month. In this context, cross-border capital flows through major channels remained stable and showed positive changes. First, banks maintained a certain scale of surplus in the settlement and sales of foreign exchange and foreign-related receipts and payments of trade in goods on behalf of clients, registering an increase from April. Second, the foreign exchange settlement of capital in foreign direct investment registered an increase, the foreign exchange purchases with capital in ODI were stale with a slight decline, and the surplus of foreign exchange settlement and sales of direct investment increased. Third, the purchase of foreign exchange with investment income by enterprises was normal and orderly, which registered a month-on-month increase due to seasonal factors but was lower than that of the same period last year. Fourth, net foreign exchange purchases by individuals continued to decrease in May, down by 28% year on year and 19% month on month respectively. Despite the complex and volatile external environment, China's economy has been running smoothly on the whole, showing strong resilience and great potential. The ongoing progress in reform and opening-up, ample macro policy space and high market confidence has provided strong fundamental support for the stability of the foreign exchange market. Meanwhile, in recent years, the RMB exchange rate formation mechanism has been constantly refined. As the bidirectional floating of foreign exchange rate has become more flexible, the risk management awareness and adaptability of market players have witnessed obvious improvement. The changes of foreign exchange receipts and payments data in May adequately reflect the increasing maturity and rationality of China’s foreign exchange market, which is expected to better stand all kinds of tests in the future. 2019-06-20/en/2019/0620/1517.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the preliminary data in the Balance of Payments for the first quarter of 2019. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues. Q: Could you brief us on the characteristics of the balance of payments for the first quarter of 2019? A: On the whole, in the first quarter of 2019, China’s balance of payments maintained basic equilibrium, registering a surplus in the current account, continuous net inflow of direct investment and securities investment and steady increase of reserve assets. The foundation for the overall equilibrium of balance of payments in the future remains solid. First, the surplus of trade in goods remains the basis for the current account surplus. In the first quarter, the current account recorded a surplus of USD 58.6 billion, with a surplus of USD 94.5 billion under trade in goods in the Balance of Payments, up by 83% year on year. To be specific, export of goods was USD 540.4 billion, up by 2% year on year, and import of goods was USD 445.9 billion, down by 7% year on year. Second, the deficit under trade in services shrank. In the first quarter of 2019, the deficit under trade in service was USD 63.4 billion, down by 14% year on year. Tourism and transport remain the major deficit items. Specifically, tourism posted a deficit of USD 57.6 billion, down by 9% year on year; the deficit in transport services was USD 12.5 billion, down by 14%. Third, direct investment and securities investment maintained net inflow. In the first quarter of 2019, the net inflow of direct investment reached USD 21.4 billion, which is mainly resulted from the net inflow of FDI of USD 44 billion and net outflow of China’s ODI of USD 22.6 billion. According to incomplete statistics, in the first quarter of 2019, China’s net inflow under securities investment was about USD 15 billion registering sustained year-on-year growth. Fourth, reserve assets continued to increase slightly, resulting in an adaptive equilibrium in the balance of payments. In the first quarter of 2019, China's reserve assets rose by USD 10 billion as a result of the BOP transactions (excluding the impact of non-transaction factors such as exchange rate and price), among which, foreign exchange reserves increased by USD 10 billion. 2019-05-10/en/2019/0604/1513.html
-
Q: The latest data on foreign exchange reserves disseminated by the State Administration of Foreign Exchange (SAFE) show that China's foreign exchange reserves as of the end of May 2019 rose by USD 6.1 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of May 2019, China posted USD 3.101 trillion in foreign exchange reserves, up by USD 6.1 billion or 0.2% month on month. In May, the US dollar index and global bond index rose as multiple factors such as escalating global trade friction and uncertainty over Brexit pushed up the risk aversion. Due to the combined impact of exchange rate translation and asset price changes, China’s foreign exchange reserves rose slightly. Since the beginning of this year, China's economy has been stable on the whole and moderately improving. The supply and demand of China's foreign exchange market have been basically balanced. Cross-border capital flows through major channels remained stable, and foreign exchange reserves grew steadily. Going forward, there will be still many political and economic uncertainties in the world, and the international financial market may become increasingly volatile. However, thanks to the adequate resilience and huge potential of China’s economy as well as the constantly improved capabilities of coping with external shocks, the long-term positive trend of China’s economic development will not change. China's sound economic fundamentals will provide strong support for the smooth operation of the foreign exchange market and provide a solid foundation for the overall stability of the foreign exchange reserves. 2019-06-10/en/2019/0610/1516.html
-
Q: The latest data on foreign exchange reserves disseminated by the State Administration of Foreign Exchange show that China's foreign exchange reserves as of the end of April 2019 declined by USD 3.8 billion month on month. Could you tell us why such a change occurred? What would you say about the future trends of foreign exchange reserves? A: As at the end of April 2019, China posted USD 3.0950 trillion in foreign exchange reserves, down by USD 3.8 billion or 0.1% month on month. China's foreign exchange market performed stably in April. On the international financial market, the US dollar index rose slightly by 0.2%, while the global bond index remained basically unchanged. Due to the combined impact of exchange rate translation and asset price changes, China’s foreign exchange reserves fell slightly. Due to the slowdown in the growth of global economy and international trade, China’s economy has been operating within a reasonable range since the beginning of this year. Market expectations and confidence have been boosted, supply and demand at the foreign exchange market has maintained basic equilibrium, cross-border capital flows through major channels have been further improved, and the size of foreign exchange reserves have remained stable on the whole. Looking ahead, there will still be many uncertainties in the international economy and financial market, but China is expected to maintain good momentum of economic growth in the long run, and will continue to promote the reform and opening-up. Given the stability of domestic economy and policies, cross-border capital flows will remain basically balanced, which will provide a solid foundation for the overall stability of China’s foreign exchange reserves. 2019-05-07/en/2019/0604/1511.html
-
Temporary rules on administrating domestic banks' overseas foreign exchange investment services on behalf of their clients released, to standardize domestic banks' operation and expand investment channels for domestic residents steadily. 2006-04-18/en/2006/0418/781.html
-
Notice on forex management of outward portfolio investment of fund management company released 2006-09-06/en/2006/0906/799.html
-
Foreign exchange administration policies of outward direct investment adjusted. 2006-06-08/en/2006/0608/788.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on bank’s foreign exchange settlement and sales as well as their foreign-related receipts and payments for customers for 2018. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on relevant issues. Q1: Could you brief us on the new characteristics of China’s foreign exchange receipts and payments situations in 2018? A: In 2018, China’s cross-border capital flow was stable on the whole, and foreign exchange supply and demand was basically balanced. Below are the major characteristics: First, banks registered a small deficit in foreign exchange settlement and sales as well as foreign-related receipts and payments for customers, which narrowed substantially as compared with that of 2017. In 2018, in dollar terms, foreign exchange settlement by banks was up by 15% year on year, and foreign exchange sales by banks, up by 11%, indicating a deficit of USD 56 billion, shrinking by 50%; banks' foreign-related receipts for customers were up by 16% year on year, and the payments up by 14%, leading to a deficit of USD 85.8 billion, shrinking by 31%. Specifically, foreign-related foreign exchange receipts and payments posted a deficit of USD 10.6 billion, narrowed by 48% from the 2017 level. Overall, due to the small deficit recorded by foreign exchange settlement and sales as well as foreign-related receipts and payments in 2018, combined with other foreign exchange trading factors on the inter-bank foreign exchange market, China’s foreign exchange market maintained basic equilibrium in terms of supply and demand, which served as the foundation of the overall stability of China’s foreign exchange reserves. Second, foreign exchange fund flow maintained slight bi-directional fluctuations, reflecting the stability of China's foreign exchange market operation. In 2018, according to statistics on banks’ foreign exchange settlement and sales, the first quarter witnessed a deficit of USD 18.3 billion, which turned into a surplus of USD 32 billion in the second quarter. A deficit of USD 41.8 billion was posted for the third quarter, which narrowed to USD 27.9 billion in the fourth quarter. Specifically, A deficit of USD 7.1 billion was recorded in December, narrowed down by 60% month on month; Statistics on bank’s foreign-related foreign exchange receipts and payments for customers indicated a surplus of USD 15.8 billion in the first quarter, a surplus of USD 4.6 billion in the second quarter, a deficit of USD 37.7 billion in the third quarter and a surplus of USD 6.8 billion in the fourth quarter. Specifically, a surplus of USD 8.2 billion was recorded in December. Third, foreign exchange sales rate was unchanged from 2017, while cross-border corporate financing remained relatively stable. In 2018, the foreign exchange sales rate that measures the willingness to buy foreign exchange, or the ratio of foreign exchange purchased by customers from banks to the customer's foreign-related foreign exchange payments was 65%, basically the same as in 2017. The sales rate was 64%, 63%, 68% and 67% respectively from the first quarter to the fourth quarter. Besides, the cross-border financing of enterprises was relatively stable, with the balance of cross-border financing for imports such as refinancing and usance letter of credit as of the end of 2018 witnessing a slight increase of 0.2% from the end of 2017. Fourth, the foreign exchange settlement rate rose, indicating market players' willingness to hold foreign exchange was weakened. In 2018, the foreign exchange settlement rate that measures the willingness to settle foreign exchange, or the ratio of the foreign exchange sold by customers to banks to the customers' foreign-related foreign exchange receipts was 65%, up by 2 percentage points from 2017. From the first to the fourth quarter of the year, the foreign exchange settlement rate was 62%, 70%, 68% and 62% respectively. As of the end of 2018, the balance of domestic foreign exchange deposits of banks dropped by USD 73 billion from the end of 2017. Fifth, in recent months, banks’ forward foreign exchange settlement and sales of banks turned into a surplus, and market expectations become more stable. In 2018, the value of contracts signed between banks and customers in respect of forward settlement of foreign exchange rose by 44% year on year, and the value of contracts signed between banks and customers in respect of forward sales of foreign exchange went up by 38%, indicating a deficit of USD 28.3 billion, slightly up by 9%. Since September, the forward foreign exchange settlement and sales contracts have maintained surplus continuously, with the surplus growing month by month to reach USD 9.6 billion in December. Q2: How do you view China's foreign exchange market operation in 2018 under the complex international situations? How do you judge the trends in 2019? A: China’s foreign exchange market remained basically balanced under the complex circumstances in 2018. In the past year, China’s foreign exchange market operated in a stable and orderly manner in spite of major changes in international environment and increased turbulence in emerging markets. It’s mainly reflected in the following aspects. Firstly, the RMB exchange rate is relatively stable as compared with other emerging market currencies. Due to the 4.4% rise in the US Dollar Index in 2018, the exchange rate of most non-USD currencies against the USD showed a downward trend. The emerging market currency index dropped by over 10%, the middle rate of RMB against USD depreciated by 4.8%, and that against the CFETS basket of currencies declined slightly by 1.7%. Secondly, cross-border capital flows were stable on the whole, and foreign exchange supply and demand maintained basic equilibrium. In 2018, the deficit of foreign exchange settlement and sales as well as foreign-related receipts and payments narrowed remarkably from the 2017 level, the domestic foreign exchange supply and demand was basically balanced on the whole and foreign exchange reserves maintained overall stability. Thirdly, the expectations and trading behaviors of market players were rational and orderly, and a sound market order was maintained. In 2018, enterprises’ utilization of foreign capital, investment abroad, cross-border financing as well as onshore guarantees for offshore loans remained basically stable. Foreign exchange purchases by individuals continued to remain stable with a slight decline in 2018, down by 7% from the 2017 level. In 2019, China’s foreign exchange market operation is expected to maintain the development trend of overall stability. Overall, the stable operation of China’s foreign exchange market in 2018 is mainly attributed to the sound foundations in terms of economy, policy and market, and such situations are expected to remain in 2019. Firstly, China’s good economic prospects in the long run will not be changed. China’s economy is still resilient enough and has great potential. China’s economic growth rate is expected to remain high with a larger base of economic aggregate, which will provide a solid economic foundation for effectively coping with changes in the external environment. Secondly, China's course of promoting all-around opening-up will remain unchanged. In 2019, China will provide greater support and more facilities in terms of market access, intellectual property rights protection, trade and investment facilitation as well as capital market opening, which will provide a solid foundation for overseas capital investment in the domestic market. Thirdly, the trend that China’s foreign exchange market operation mechanism will become increasingly mature will not be changed. Presently, the bi-directional floating of RMB exchange rate has been intensified, which is conducive to strengthening a more diversified and rational market expectation; Integrating macro-prudential and micro-regulatory approaches for cross-border capital flow can help maintain the healthy order of foreign exchange market, which will lay a sound market foundation for promoting the autonomous equilibrium of the balance of payments. Q3: What's your view of the impact of the Fed interest rate hike on China's foreign exchange market and cross-border capital flows? What will be the impact of a slowdown in Fed rate hike in 2019? A: In the past several years, external environment has undergone major changes such as adjustments in monetary policies by major developed economies, but China’s foreign exchange market has withstood such ordeals and has gradually improved its capabilities to make adjustment and take countermeasures. Since the Fed pulled out of the quantitative easing policy in the second half of 2014 and raised interest rates for the first time at the end of 2015, the monetary policy adjustments of the Fed has indeed created a strong spillover effect. Emerging economies in general are affected, especially those with fragile fundamentals, where their currency depreciation is large and capital outflow is aggravated. In some periods, China’s foreign exchange market and cross-border capital flow underwent apparent fluctuations as well. However, thanks to the high growth rate of China’s domestic economy, overall social stability, tremendous market potential, sustained advancing of opening-up and reform, as well as the proactive and effective macro-prudential and micro-regulatory measures, China successfully coped with challenges brought about by external shocks and achieved outstanding performance on the whole among emerging markets and even on a global scale. In recent years, China’s foreign exchange market has become more mature in the process of continuous development, making adjustments and coping with various situations. The expectations and behaviors of market players have become more rational, and their experience of taking countermeasures has been accumulated and enriched. In 2019, China’s foreign exchange market still has the solid internal foundation for smooth operation, and the slowdown in Fed interest rate hike and other external factors are also expected to provide more favorable conditions. In 2018, the Fed raised interest rates four times consecutively, which pushed up USD interest rate and exchange rate, making some emerging economies suffer considerable shocks. In 2019, if the Fed slows down its pace of interest rate hike, the marginal increase of USD interest rate will surely be reduced. In this scenario, monetary policy divergence between the US and other major developed economies may weaken, and the USD exchange rate will tend to stabilize as well. Of course the monetary policy adjustment of the Fed only constitutes one aspect of external environment, and there are many other factors which will influence the international environment in 2019. However, China’s economy will maintain sound development trend in the long run, efforts will be made to further advance reform and opening-up unswervingly, and the foreign exchange market is expected to become more mature and rational, thus better adapting to any changes in external environment. Q4: The structure of China’s balance of payments changed substantially in 2018. The surplus under the current account fell and the surplus under the financial account (excluding reserve assets) increased. How do you comment on this change? What would you say about the future trends? A: In 2018, China’s balance of payment presented a pattern of autonomous equilibrium. Based on preliminary statistics, China’s current account showed surplus of a certain scale in 2018 on the whole. Quarterly changes show that, although the current account posted a deficit in the first quarter, it maintained a surplus from the second quarter to the fourth quarter, which increased quarter by quarter. As a result, the surplus under the current account still remained within a reasonable range for the whole year. Meanwhile, the current account and financial account (excluding reserve assets) maintained autonomous equilibrium. Under this structure of balance of payments, China’s reserve assets remained basically stable in 2018 on the whole, and the RMB exchange rate throughout the year held relatively steady on a global scale. In the future, China is expected to maintain the development trend of basic equilibrium of current account and autonomous equilibrium of balance of payments. China’s current account balance will still remain within a reasonable range. Firstly, the domestic manufacturing industry boasts of mature infrastructure, complete industrial chain, and a large number of skilled workers. Coupled with continuous promotion of transformation and upgrade, the above advantages can facilitate relevant products to maintain strong international competitiveness and continue to own big market both at home and abroad. Secondly, with the improvement of domestic product quality, ecological environment, education and other soft power, domestic residents’ cross-border consumption will become more rational and stable, which is conducive to the smooth operation of current account. The overall stability of cross-border capital flows will remain relatively high, and capital inflows for medium- and long-term investment under the capital account have a large room for improvement. Based on data from the first three quarters of 2018, among all types of foreign capital inflows, the net inflow from FDI accounted for 36%, up by 9 percentage points year on year. With the further expansion of China’s opening-up areas and increasing importance of the domestic market, China will still have big potential in attracting direct investment. According to statistics of the United Nations Conference on Trade and Development (UNCTAD), China’s stock of FDI was 12% of GDP at the end of 2017, while the global average was 39%, and the average of developing countries was 33%. Besides, in the first three quarters of 2018, the net inflow from foreign securities investment in China accounted for 37%, representing an increase of 11 percentage points year on year. Specifically, debt securities investment increased more, which included inflow of funds from foreign central banks and other institutions for the purpose of medium- and long-term asset allocation. At present, the proportion of foreign investors in the domestic capital market is on the low side. In the future, with the policy of further opening-up and facilitation, China will become an important destination for the diversified asset allocation of international capital. Q5: What are the priorities of foreign exchange administration work in 2019? What measures will be taken in foreign exchange administration system reform, liberalization of the capital account and the management of cross-border capital flow? A: In 2019, the foreign exchange authorities will carry out the decisions and deployment of the CPC Central Committee and the State Council in an all-around manner, adhere to the key guideline of seeking progress in stability, stick to the structural reform on the supply side as the main line, persist in deepening market-oriented reform, expand high-level opening-up, deepening the reform of “delegation, regulation and service”, and thoroughly advance opening-up and reform in foreign exchange area according to the requirements of the “Six Stabilities”, so as to vigorously serve the sustained and sound development of the real economy. On the one hand, we will deepen reform and opening-up in the foreign exchange area. Efforts will be made in a steady and orderly manner to advance liberalization of the capital account, further improve qualified foreign institutional investor system, and make research on the foreign exchange administration framework for foreign-invested enterprises under the management system based on pre-establishment national treatment and negative list. The SAFE will further open up the foreign exchange market in both directions, enrich trading instruments, broaden trading entities, and build an open and competitive foreign exchange market. Efforts will be made to deepen foreign exchange administration reform of “delegation, regulation and service”, optimize foreign exchange administration services, promote trade and investment liberalization and facilitation at a higher level, further support the development of pilot free trade zones and Guangdong-Hong Kong-Macao Greater Bay Area, and support Hainan in deepening reform and opening-up in an all-around manner. On the other hand, the capabilities of preventing and resolving risks from cross-border capital flow should be enhanced. Efforts will be made to improve the two-pronged administration framework featuring macro-prudential and micro-regulatory approaches for cross-border capital flow, and adjust foreign exchange market fluctuations in a market-based and counter-cyclical manner, so as to maintain the stability, consistency and predictability of foreign exchange micro-regulation across the cycles. The SAFE will reinforce foreign exchange administration inspection and enforcement, crack down upon all kinds of illegal and irregular conducts, carry forward construction of digital foreign exchange administration” and “secure foreign exchange administration", improve foreign exchange reserve operation and management, so as to ensure the security, liquidity, value preservation and appreciation of foreign exchange reserves, maintain a sound order of the foreign exchange market and safeguard the national economic and financial security. 2019-01-18/en/2019/0118/1489.html
-
The State Administration of Foreign Exchange (SAFE) has recently released data on banks' foreign exchange sales and settlement and their foreign-related receipts and payments for customers forOctober 2018. The SAFE press spokesperson Wang Chunying answered media questions on cross-border capital flow situations in October. Q: What would you say about China's cross-border capital flows in October? A: China’s deficit in foreign-related receipts and payments narrowed substantially, with cross-border capital flows remaining stable on the whole, and supply and demand on the foreign exchange market maintained basic equilibrium. In this month, banks posted deficit of USD2.9 billion in foreign exchange settlement and sales, down by 83% from September. The non-banking sectors such as domestic enterprises registered a deficit of USD7.4 billion in foreign-related receipts and payments, narrowing by 73% on a month-by-month basis. Specifically, foreign exchange receipts and payments turned from deficit in September to a surplus of USD4.6 billion. The deficit in foreign exchange settlement and sales and foreign-related receipts and payments in October fell significantly, indicating that China’s cross-border capital flows are still showing two-way fluctuations and overall steady development. In the first ten months of this year, banks' deficit in foreign exchange settlement and sales declined 72% year on year, while foreign-related receipts and payments decreased 43% on a year-on-year basis. Foreign exchange transactions of market players are stable and rational, and foreign exchange market has been operating normally and orderly. First, the settlement of FDI increased steadily, with the settlement of FDI capital in October increasing by 11% year on year. Second, the foreign exchange purchase by enterprises forODI is rational and stable. In October, the purchase of foreign change with ODI capital was basically the same with that of the same period last year. Third, foreign exchange purchase with investment income fell seasonally and declined on the whole. In October,relevant foreign exchange purchase decreased by 55% month on month, while the figure of the first ten months this year fell by 16% on a year-on-year basis. Fourth, the foreign exchange settlement and sales of individuals remained rational. In October, net purchase of foreign exchange by individuals was stable with slight decline, down by 6% from September. Fifth, the contracts for forward settlement and sales of foreign exchange showed a slight surplus of USD2.8 billion, up from a surplus of USD300 million in September. At present, the global economic and financial operation is confronted with some uncertainties, and China still has some advantages in coping with them. First of all, in the complex and changing international environment, China’s stable economic and political patterns have become more prominent, the intensity of reform and opening-up has been more highlighted, and the huge market potential has become more attractive. China will persist in advancing structural reform at the supply side and doing a good job in stabilizing employment, finance, foreign trade, foreign investment, investment and expectations, which is expected to effectively cope with changes in external environment and lay a solid foundation for the overall stability of China’s foreign exchange market.Secondly, the two-way floating elasticity of RMB exchange rate has been enhanced in recent years, and market players have become more rational in the face of changes in foreign exchange market situations. Meanwhile, China has accumulated rich practical experience and adequate policy tools in coping with such situations, and can play a more flexible role in macro-prudential regulation to maintain stability of the foreign exchange market. 2018-11-15/en/2018/1115/1473.html
-
The State Administration of Foreign Exchange (SAFE) has recently disseminated the data on banks' foreign exchange settlement and sales as well as their foreign-related receipts and payments for customers for January 2019. The SAFE spokesperson and Chief Economist Wang Chunying answered media questions on foreign exchange receipts and payments for January 2019. Q: Could you brief us on China's foreign exchange receipts and payments for January? A: Since the beginning of 2019, China's foreign exchange market has been running more smoothly. In January, banks' foreign exchange settlement and sales and foreign-related receipts and payments both showed a surplus. Based on relevant statistics, firstly, the balance of banks' foreign exchange settlement and sales turned from deficit to surplus. In January, banks' foreign exchange settlement increased by 9% on a month-on-month basis, while their foreign exchange sales fell by 2%, resulting in a surplus of USD 12.1 billion in foreign exchange settlement and sales. Secondly, the surplus of banks' foreign-related receipts and payments for customers was further expanded. In January, non-bank sectors such as enterprises and individuals registered a month-on-month increase of 6% in foreign-related receipts, and a decrease of 6% in foreign-related payments, resulting in a surplus of USD 41.3 billion, representing significant rise from a surplus of USD 300 million in December 2018. Thirdly, the balance of foreign exchange reserves continued to rise. Generally, the supply and demand of the domestic foreign exchange market remained basically balanced in January. The exchange rate of non-USD currencies rose against the US dollar, and the price of major financial assets increased to certain extent, which jointly boosted the balance of foreign exchange reserves of the month by USD 15.2 billion. The foreign exchange market is expected to further improve, with positive changes witnessed in cross-border capital flows through major channels. Since the beginning of 2019, the willingness of market players to settle foreign exchange has increased, while their willingness to purchase foreign exchange has continued to decline. In January, the settlement rate that measures the willingness to settle foreign exchange, or the ratio of the foreign exchange sold by customers to banks to the customers' foreign-related foreign exchange receipts was 63%, up by 3 percentage points month on month. The selling rate that measures customers' willingness to buy foreign exchange, or the ratio of foreign exchange purchased by customers from banks to the customer's foreign-related foreign exchange payments was 64%, down by 1 percentage point from the previous month. Under such circumstances, the foreign exchange receipts and payments of main channels presented positive changes in January. First, the surplus in banks' foreign exchange settlement and sales under trade in goods for customers and the surplus in foreign-related foreign exchange receipts and payments increased by 96% and 2.9 times respectively on a month-on-month basis. Second, the foreign exchange settlement and sales under direct investment and foreign-related receipts and payments has maintained a big surplus. Third, foreign exchange settlement and sales under portfolio investment turned from deficit to surplus, and the surplus of foreign-related receipts and payments posted a month-on-month growth of 70%. Fourth, foreign exchange purchase by individuals maintained stable with a slight decline, down by 11% year on year. Fifth, the contracts for forward settlement and sales of foreign exchange maintained surplus for five consecutive months. Since the beginning of this year, China's macro policies have intensified counter-cyclical adjustment and continued to pursue a proactive fiscal policy and a prudent monetary policy, which has further boosted market confidence and helped stabilize the foreign exchange market. Next, China will further advance the structural reform on the supply side, vigorously promote the all-around opening-up, keep the economy operating within a reasonable range, which is conducive to consolidating the foundation for stable operation of China's foreign exchange market. 2019-02-22/en/2019/0222/1493.html