SMM: a few days ago, the State Administration of Foreign Exchange announced the data of bank settlement and sale of foreign exchange and foreign-related payments received by banks on behalf of customers in August 2020. Wang Chunying, deputy director of the State Administration of Foreign Exchange and spokesman, answered a reporter's question on the situation of foreign exchange revenue and expenditure in August 2020.
Q: what is the change in China's foreign exchange revenue and expenditure situation in August 2020?
A: there is a basic balance between supply and demand in China's foreign exchange market in August. First, the deficit between banks' settlement and sale of foreign exchange was 3.8 billion US dollars, 29% smaller than the same period last year. Taking into account the foreign exchange transactions of overseas institutions in the interbank foreign exchange market, changes in banks' foreign exchange positions and other factors, the overall balance of supply and demand in the foreign exchange market. Second, the non-bank sector has a net cross-border capital inflow of US $12.7 billion, which is at a relatively high level in the near future. Third, the scale of foreign exchange reserves increased steadily, reaching US $3.1646 trillion at the end of August, an increase of US $10.2 billion over the end of July.
Cross-border capital flows from major channels continue to show positive changes. First, the cross-border surplus of trade in goods has increased. In August, the cross-border surplus of trade in goods increased 1.1 times compared with the same period last year, of which income from trade in goods increased by 2.6%, while expenditure decreased by 3.1%. Second, the seasonal peak of corporate dividends ends. In August, the deficit between income and current transfer settlement and sale of foreign exchange decreased by 34% from the previous month, mainly due to a 39% decrease in investment income. Third, the inflow of foreign capital into the domestic bond market remains high. In August, foreign investors increased their domestic bond holdings by a net $21 billion, higher than the historical average.
At present, there are still many unstable and uncertain factors in the external environment, but China's institutional advantages, long-term economic improvement, broad market space and strong development toughness will provide fundamental support for the stability of China's foreign exchange market. China will gradually form a new development pattern with the domestic big cycle as the main body and the domestic and international double cycles promote each other, which is conducive to maintaining our current account in a reasonable range as a whole. The steady progress of the two-way opening up of financial markets is conducive to the balanced flow of cross-border capital. The development of the foreign exchange market is more mature, the trading behavior is rational and orderly, and the flexibility of the RMB exchange rate is enhanced, which will continue to play the role of "automatic stabilizer" for regulating the macro-economy and the balance of payments.
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