2010-09-20 16:39

China's funds outstanding for forex, a key measure reflecting capital inflows into China, increased by 243 billion yuan ($36 billion) in August, reaching the highest point since May and the second peak this year, Xinhuanet reported Monday.

According to the statistics from the central bank, as of August, the central bank and Chinese institutions spent a total of 21.04 trillion yuan to absorb foreign exchange flowing into China.

Analysts say the increase in the data was mainly caused by the inflow of overseas hot money.

Zhang Ming, an economist at the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, said in the first four months of this year, China's funds outstanding for forex increased distinctly as foreign capital kept flowing into China. But the growth slowed down in the May-July period and short-term cross-border capital flowed out, driven by Europe's debt crisis.

The August data showed a turning point in foreign capital flow, he added.

China's newly added funds outstanding for forex was 198 billion yuan in July, 117 billion yuan in June, 132 billion yuan in May, and 286 billion yuan in April, according to Reuters data.