China's foreign exchange regulator said Wednesday that Chinese bought more foreign currencies than they sold through Chinese banks in November, resulting in an 800-million-U.S.-dollar forex deficit in banks for the month.
Chinese institutional and individual clients exchanged 128.9 billion U.S. dollars in foreign currencies for Renminbi in November, and bought 129.7 billion U.S. dollars in foreign exchanges from banks, according to a statement by the State Administration of Foreign Exchange (SAFE), China's forex regulator, on its website.
Compared with a forex surplus of 3.2 billion U.S. dollars in October, banks' November forex deficit came as the Chinese currency Renminbi, or the yuan, once fell for 12 consecutive days in its value against the U.S. dollar in the foreign exchange spot market in the month.
The People's Bank of China, the country's central bank, set the yuan's central parity rate at a record high of 6.3165 per U.S. dollar on Nov. 4, but it later weakened 420 basis points to 6.3585 per U.S. dollar on Nov. 29.
In China's spot money market, banks are allowed to exchange the yuan 0.5 percent above or below the central parity rate each trading day.
The SAFE statement noted that banks' foreign exchange deficit figures did not include banks' own forex transactions and interbank transactions.
In November, the overseas business-related proceeds of China's domestic institutional and individual clients via banks totaled 210.8 billion U.S. dollars and paid 192.9 billion U.S. dollars to overseas businesses, according to the SAFE data.
Taking the first 11 months together, the clients-to-banks transactions resulted in a foreign currency surplus of 383.1 billion U.S. dollars, with 1.4553 trillion U.S. dollars in foreign currencies sold by clients to banks and 1.0722 trillion U.S. dollars in foreign currencies bought by Chinese, according to the SAFE.
