2017.04.2011:05:00UTC+00China's Capital Outflow Pressure Ease Significantly in Q1, Net Foreign Exchange Sales fall 67 Pct Y/y - Safe

According to data released by State Administration of Foreign Exchange (SAFE) on Thursday, Chinese banks' net foreign exchange sales contracted 67 percent year-on-year to 281.5 billion yuan ($40.9 billion) in Q1 2017 as the domestic economic growth picked up and the U.S. dollar weakened.

The renminbi fell 7.5 percent in 2016, its worst year ever, but the currency has risen 0.9 percent so far this year. China’s foreign-exchange reserves hit a four-year low in January as the central bank sold dollars to prop up the renminbi, however, it rose slightly in both February and March, reversing a seven-month run of declines.

Capital outflow pressure has greatly eased, and the supply and demand for China's foreign exchange reserves have basically been balanced since the beginning of 2017, the State Administration of Foreign Exchange (SAFE) spokesperson Wang Chunying said at a press conference in Beijing.

A more stable domestic economy and international financial market, especially the U.S. dollar, are primarily supporting the balance, Wang said. Wang expects China's cross-border capital flow will continue to head toward a balance thanks to the high growth rate of China's economy and measures to attract foreign capital.

China stocks paused a 4-day losing streak and regained footing, as country’s pressure on capital outflow eased significantly in Q1. China's CSI300 index closed up 0.5 pct at 3,461.55 points, while, Shanghai Composite Index closed flat at 3,172.10 points.