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Yuan funds for foreign exchange hit record high

English.news.cn   2013-03-05 20:04:46            

BEIJING, March 5 (Xinhua) -- China's financial institutions saw their yuan funds outstanding for foreign exchange increase 683.7 billion yuan (108.9 billion U.S. dollars) in January, the highest level on record,central bank data showed Tuesday.

As of the end of January, Chinese financial institutions' total yuan funds outstanding for foreign exchange amounted to 26.5 trillion yuan, according to People's Bank of China figures.

This marked the second consecutive month of rises, a sign of increasing capital inflow amid China's economic recovery.

The China International Capital Corporation (CICC) said in a recent report that the substantial rise was mainly caused by short-term factors, including the cyclical liquidity expansion and the inflow of hot money into the stock and property markets.

But the trend will not last following the country's new property curbs, the report forecast.

"There is no need for significant monetary tightening to offset the increase in funds outstanding for foreign exchange," the report said, adding that the central bank is unlikely to introduce drastic measures, such as raising the banks' reserve requirement ratio, to drain liquidity.

Editor: Chen Zhi
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