The State Administration of Foreign Exchange (SAFE) has recently released data on foreign exchange settlement and sales by banks as well as cross-border receipts and payments by non-banking sectors for August 2024. The SAFE officials answered media questions regarding the topic.

Q: Could you brief us on China’s foreign exchange receipts and payments for August 2024?

A: Supply and demand in China's foreign exchange market were basically in equilibrium with more stable cross-border capital flows. In August, the foreign-related receipts and payments by non-banking sectors, including enterprises and individuals, registered a surplus of USD 15.3 billion. Domestic entities slowed down in foreign exchange purchase, and gradually had more demand for foreign exchange settlement, closing the difference between foreign exchange settlement and sales by banks. Thanks to improving internal and external environment, China's foreign exchange market is expected to be more stable in the near future, with rational and orderly market transactions.

Cross-border capital flows through major channels generally changed for the better. Supported by the continued recovery of China's foreign trade, the net inflows of cross-border capital under trade in goods witnessed an 11% year-on-year increase in August. Foreign institutions continued to increase their holdings of domestic bonds, and foreign capital still showed a strong willingness to allocate RMB assets. In addition, the dividend payout of foreign-invested enterprises fell seasonally, and the cross-border financing of affiliated enterprises tended to be stable.

Looking ahead, China's foreign exchange market will sustain stable operations. Domestically, there will be more positive factors and favorable conditions for its economic operation, and China will consolidate and expand the momentum of economic rebound. At the same time, China will further advance the development and reform of its foreign exchange market, and improve the internal resilience of its market, which will continue to play a positive role in stabilizing market expectations and transactions. Globally, as developed economies such as Europe and the United States start a cycle of interest rate cuts, the international financial market environment is expected to be more favorable.