next day delivery on Maxalt saturday In the first quarter, China eased the capital outflows sharply, and cross-border flows were more balanced the foreign exchange regulator.
Capital outflows from China eased sharply in the first quarter and cross border flows were more balanced, the foreign exchange regulator said on Thursday, in the latest official comments indicating policymakers are growing less worried about the yuan currency.
Reduced pressure from outflows has helped steady the yuan this year and brought China’s foreign currency reserves back over the closely watched $3 trillion mark.
Expectations for further yuan depreciation have weakened significantly, State Administration of Foreign Exchange (SAFE) spokeswoman Wang Chunying told a news conference.
Net foreign exchange sales by China’s commercial banks fell sharply in the first quarter after policymakers tightened supervision on money leaving the country and as a weaker U.S. dollar took pressure of the yuan and other emerging currencies.
Net sales of foreign exchange by Chinese commercial banks dropped to $40.9 billion in the first quarter, compared with $124.8 billion in the first quarter of 2016 and $337.7 billion in sales last year, SAFE data showed.
The yuan slumped around 6.5 percent against the surging dollar last year, but has firmed nearly 1 percent so far in 2017 at the dollar recoiled.
Though most analysts polled by Reuters earlier this month [AXJ/POLL] still expect the yuan’s downtrend to resume later in the year — assuming the dollar will recover — some market watchers such as Macquarie Capital Ltd now forecast no depreciation this year.
China’s improving economy has helped support the currency even as the U.S. central bank raises interest rates, Wang said. The economy grew at the strongest pace since mid-2015 in the first quarter.
The central bank said last week its net foreign exchange sales in March were the lowest in 10 months at 54.7 billion yuan ($7.94 billion), while China’s foreign exchange reserves edged up in March to $3.009 trillion.
Premier Li Keqiang said on Tuesday that market confidence in the yuan has significantly improved, Xinhua news agency reported.
Sources told Reuters on Wednesday that China’s central bank has relaxed some of the curbs on cross-border capital outflows, the first signs of easing of measures put in place last year as authorities and financial markets feel more confident that pressure on the yuan has eased.
As the yuan fell against the dollar and capital outflows accelerated late last year, the government stepped up capital controls, making it harder for individuals and companies to move money out of China.
Those measures are credited with quashing speculative outflows and helping to stabilize the currency, but have also hampered legitimate outflows as China Inc goes more global.
Non-financial outbound direct investment from China tumbled 48.8 percent in the first quarter year-on-year, with dealmakers saying many Chinese firms are unable to close deals because they cannot secure official permission to transfer yuan into foreign currency.
But Wang said on Thursday China will push forward with opening up its capital account in a prudent and orderly way and will not backtrack by adding more capital controls.
“China’s foreign exchange management will not turn back, we will not go back down the old road of capital controls,” said Wang.
While clamping down on outflows, China has also been looking to encourage more inflows by opening up its bond market to foreign investors and promising to open more sectors to foreign investment.
Foreign central banks held $81.1 billion in yuan assets at the end of last year, up 13 percent, with 92.5 percent of those assets in bonds, SAFE data showed.
That number was slightly different from the International Monetary Fund’s total of $84.51 billion in foreign government-held yuan assets, with Wang saying the reason for the difference could be that some yuan assets were held by intermediaries.
The yuan was added to the International Monetary Fund’s basket of reserve currencies last October, but fears of further weakness have impaired Beijing’s push for more global usage of the currency and foreign investors’ appetite for yuan assets.