BEIJING, May 28 -- Chinese financial institutions held 20.35 trillion yuan ($2.98 trillion) funds outstanding for foreign exchange by the end of April, up 286.31 billion yuan from March, the Shanghai Securities News reported Thursday, citing data from the People's Bank of China.
Generally speaking, an increase in the funds outstanding for foreign exchange is pushed by foreign trade surplus, foreign direct investment (FDI) or cross-border capital inflow.
But according to statistics by the Ministry of Commerce, China's foreign trade surplus and FDI in April was $9 billion. The rest, about 200 billion yuan, or over 70 percent of the funds outstanding for foreign exchange rise in April, was attributed to short-term overseas capital inflow, said experts.
The net foreign capital inflow was caused by surging direct investment surplus, up 79 percent year-on-year, commercial banks' deployment alteration of their foreign exchange assets in China, the $13-billion increase of registered foreign debt and net trade credit inflow, sources with the State Administration of Foreign Exchange said in the report.
The sources also said that the capital influx to China reflects international capital's optimistic prospect for China's economic growth. Meanwhile, agencies and individuals tend to convert foreign exchange assets to renminbi because of the lower US dollar interest rate.
However, no large-scale overseas hot money inflow has been found so far, according to the administration's survey.
New funds outstanding for foreign exchange stood at 1.03 trillion yuan in the first four months of this year, the report said.