(Yicai Global) Oct. 25 -- Good economic fundamentals, the continued opening-up of markets, further improvements in market maturity and other factors are helping to keep China's cross-border capital flows stable, a chief economist at China's State Administration of Foreign Exchange said today.
Although the external environment is complex and changeable, China's foreign exchange market has been generally well-balanced since the start of the year, Wang Chunying, head of SAFE's Balance of Payments Department, said at a press conference addressing the country's forex balance of payments in the first three quarters.
The balance in forex supply and demand is largely due to the overall good performance of the Chinese economy despite slowing global growth, he said. The Chinese yuan's exchange rate is relatively stable among global currencies and cross-border investment and fundraising also remain steady.
The collective deficit in Chinese banks' forex settlement and sales reached CNY24.3 billion (USD3.4 billion) last month and CNY329.2 billion (USD46.6 billion) in the first three quarters, according to statistics released by SAFE today.
The average monthly deficit from January to September was USD5.4 billion, just 1.8 percent of the amount settled and sold by the banks, he added.
Together with a slight surplus in international spending and receiving by non-bank financial institutions, this has allowed the country's forex reserves to grow at a steady rate.
More rational domestic forex market forces have helped by buying the yuan when the exchange rate drops and selling it when the price rises, he added. This behavior has adjusted forex supply and demand, calmed exchange rate fluctuations and promoted market stability.
A series of policies introduced by the government to boost market confidence, continued progress in China-US trade negotiations and other developments have also made favorable and positive contributions to the market, Wang added.