China's bank forex surpluses grow faster

Updated: 2011-05-04 15:17
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BEIJING - The growth of Chinese banks' foreign exchange surpluses from bank-to-client transactions accelerated in March, helping to contribute to China's rapidly expanding foreign exchange reserves, according to the State Administration of Foreign Exchange (SAFE).

More foreign currencies were sold than bought through Chinese banks in March as the yuan continued to appreciate, resulting in $40.9 billion of forex surplus in the month of March, SAFE said in a statement on its website.

The March surplus was up from $24.9 billion in February but remained smaller than January's forex surplus of $68.4 billion, according to the statement. Many Chinese people and companies settle their foreign currency assets during the first month of the year.

China's institutional and individual clients exchanged $135.4 billion in foreign currencies in March and made other foreign exchange transactions worth $94.5 billion, according to SAFE.

The March data brought Chinese banks' foreign exchange surpluses for the first quarter to $134.2 billion.

Foreign exchange surpluses, which make up part of China's foreign exchange reserves together with current account surpluses and foreign direct investment inflow, do not include banks' own forex transactions or interbank transactions, SAFE said.

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In March, overseas business-related proceeds from China's domestic institutional and individual clients totaled $188.4 billion, SAFE said.

China's foreign exchange reserves hit a historic high of $3.04 trillion by the end of March, up 24.4 percent year on year, according to the People's Bank of China (PBOC), the central bank.

The gradual appreciation of China's currency prompted many Chinese to exchange their foreign currency assets for yuan. To date, the yuan has risen by more than 1.8 percent this year after its central parity rate hit a record high of $6.499 per on April 29.

Last year, foreign exchange surpluses created through Chinese banks' transactions with domestic clients increased 51 percent year on year to reach $397.7 billion.