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FOREIGN EXCHANGE | Cesar Tordesillas, China

Chinese banks sell more forex than it purchased

Chinese banks bought US$110.2 billion on behalf of clients in April and sold US$113.9 billion U.S. dollars, resulting in a net sale of 3.7 billion U.S. dollars.

This was relayed by the State Administration of Foreign Exchange.

It was the first net forex sale this year following net purchases of 19.4 billion U.S. dollars in January, 4.4 billion U.S. dollars in February and 7.8 billion U.S. dollars in March.

The figure indicates that companies and individuals have become more willing to hold foreign currency, as expectations for the yuan's appreciation have eased, said Zhao Qingming, a senior researcher from China Construction Bank.

The change of expectations was due to China's slowing economy and a stronger U.S. dollar favored by investors amid worries over the European sovereign debt crisis, Zhao said.

In the first four months, Chinese banks bought US$480.4 billion in foreign currency on behalf of clients and sold 452.5 billion U.S. dollars, bringing the net purchase volume to 27.9 billion U.S. dollars, according to the SAFE statement.

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