FOREIGN EXCHANGE | Staff Reporter, China

China’s banking system's net forex purchases rocket in September

Jumps 3,600% to US$20.7 billion from US$4.5 billion in August.

The People’s Bank of China and financial institutions bought a net US$20.7 billion of foreign currency in September, according to Dow Jones based on central bank data. The banking system's foreign currency purchase position amounted to US$4.52 trillion at the end of September, compared to the US$4.49 trillion at the end of August. September is the second straight month of net purchase suggesting continuing capital inflows. The September total follows two months of net sales. The data include purchases and sales by commercial banks and other financial institutions but mostly reflect transactions by the central bank. Most analysts view the figures as a proxy for inflows and outflows of foreign capital since most foreign currency entering China is generally sold to the PBOC.

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