Tuesday, 16 Oct 2018
Business

China’s yuan funds to buy foreign currency increase in June

Spanish >> Economy

Updated at 07/20/2018 – 09:05

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BEIJING, July 19 (Xinhua) – The Chinese yuan funds in circulation for the purchase of foreign currency grew in each month of the first semester, official data showed Thursday.

The funds amounted to 21.52 trillion yuan (about 3.2 trillion dollars) at the end of June, which is an increase of 7.610 million from the previous month, according to the People’s Bank of China, the country’s central bank.

The increase in June followed the increase of 9.1 billion yuan recorded in May.

As the Chinese currency is not freely convertible under the capital account, the central bank has to acquire foreign currency generated by China’s trade surplus and foreign investment in the country to add funds to the asset market.

Such funds are an important indicator of cross-border foreign capital flows and the domestic liquidity of the yuan. An increase is usually indicative of a drop in pressure from capital flight, while a fall means the opposite, usually.

China’s foreign exchange reserve remained relatively stable at 3.111 trillion dollars at the end of June, 0.05 percent more than in May, data showed previously.

“China has a large foreign exchange reserves and a relatively large space for control policies, China is capable and confident to face all kinds of challenges,” said Wang Chunying, spokesman for the State Administration of Foreign Exchange at a press conference held today.

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