The supply and demand of foreign exchange market is basically balanced

According to the State Administration of foreign exchange on November 19, a few days ago, the State Administration of Foreign Exchange announced the data of foreign exchange settlement and sale by banks and foreign collection and payment by banks on behalf of customers in October 2019. Wang Chunying, a spokesman for the State Administration of foreign exchange and chief economist, answered questions about the situation of foreign exchange receipts and payments in October.

Q: What's the change of China's foreign exchange balance in October 2019?

A: In October, the supply and demand of the foreign exchange market was basically balanced, and cross-border capital flows remained stable. First, the bank's foreign exchange settlement and sales were generally stable. In October, the deficit of foreign exchange settlement and sales of banks was 4.4 billion US dollars, lower than the average level of the previous nine months. If other supply and demand factors such as forward and options are considered comprehensively, the supply and demand of domestic foreign exchange market will be basically balanced in October. Second, the bank's foreign revenue and expenditure on behalf of customers showed a surplus. In October, enterprises, individuals and other non banking sectors had a surplus of US $10.9 billion in foreign payments, after a small deficit in March September. Third, the balance of foreign exchange reserves rose to $3105.2 billion at the end of October, an increase of $12.7 billion on a month on month basis. The foreign exchange market is expected to be more stable, and cross-border capital flows through major channels are stable and positive. On the one hand, the supply of foreign exchange from the main inflow channels increased steadily. For example, the cross-border balance of goods trade and the surplus of settlement and sale of foreign exchange rose on a year-on-year basis; the cross-border capital inflow of foreign direct investment and securities investment continued to increase on a year-on-year basis. On the other hand, the demand for foreign exchange in the main outflow channels remained stable. For example, cross-border expenditure and foreign exchange purchase of service trade decreased steadily, down 6% and 14% year-on-year respectively in October, mainly due to the decrease of personal travel expenditure and foreign exchange purchase; cross-border capital outflow and foreign exchange purchase of foreign direct investment remained basically stable. At present, in the complex and severe external environment, China's economy has shown great resilience, potential and vitality. Its economic operation remains within a reasonable range, and its high level of opening up continues to advance, providing a solid foundation for the stability of the foreign exchange market. At the same time, the rational and orderly foreign exchange trading behavior of market subjects shows that China's foreign exchange market is more mature, which is conducive to the continuation of the basic balance of foreign exchange supply and demand.